美國
證券交易委員會
華盛頓特區20549
形式
1934年證券交易法
日終了的財政年度
委員會檔案編號
(Name業務發行人在其章程中的規定）
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（註冊成立的州或其他司法管轄區或 |
| （國稅局僱主識別號） |
（主要行政辦公室地址）
（發行人電話號碼，包括地區代碼）
根據法案第12（b）條登記的證券：無
根據法案第12（g）條登記的證券：
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（班級名稱） |
| (Name註冊的交易所） |
如果註冊人是《證券法》第405條所定義的知名經驗豐富的發行人，則通過勾選標記進行驗證。
是的 ☐
如果註冊人無需根據該法案第13條或第15（d）條提交報告，則用勾號進行標記。
是☐
通過勾選標記標明註冊人是否（1）在過去12個月內（或在註冊人被要求提交此類報告的較短期限內）提交了1934年證券交易法第13或15（d）條要求提交的所有報告，以及（2）在過去90天內是否遵守此類提交要求。
用複選標記表示註冊人是否已在過去12個月內(或在註冊人被要求提交此類檔案的較短時間內)以電子方式提交了根據S-t規則第405條(本章232.405節)要求提交的每個交互數據檔案。
用複選標記表示根據S-k條例第405項披露的違約者是否不包含在此，據註冊人所知，也不會包含在通過引用併入本表格第III部分的最終委託書或資訊聲明中的第10-k項或本表格的任何修正案中。☒
用複選標記表示公司是較大的加速申報公司、加速申報公司、非加速申報公司、較小的報告公司或新興成長型公司。請參閱《交易法》第120億2條規則中的“大型加速申報公司”、“加速申報公司”、“較小報告公司”和“新興成長型公司”的定義。
大型加速文件夾 | ☐ | 加速編報公司 | ☐ |
☒ | 小型上市公司 | ||
|
| 新興成長型公司 |
如果是一家新興的成長型公司，用複選標記表示註冊人是否已選擇不使用延長的過渡期來遵守根據交易所法案第13(A)節提供的任何新的或修訂的財務會計準則。☐
用複選標記表示註冊人是否提交了一份報告，證明其管理層根據《薩班斯-奧克斯利法案》(《美國法典》第15編第726(B)節)第404(B)條對其財務報告的內部控制的有效性進行了評估，該評估是由編制或發佈其審計報告的註冊會計師事務所進行的。
如果證券是根據該法第12(B)條登記的，應用勾號表示登記人在備案中的財務報表是否反映了對以前發佈的財務報表的錯誤更正。
用複選標記表示這些錯誤更正中是否有任何重述需要對註冊人的任何執行人員在相關恢復期間根據第240.10D-1(B)條收到的基於激勵的補償進行恢復分析。☐
用複選標記表示註冊人是否是空殼公司(如《交易法》第120億2條所定義)。
是
2024年9月27日，大約有
註冊人的非關聯公司於2023年12月31日持有的有投票權股票的總市值約為美金
第一部分
關於前瞻性陳述的特別注釋
本報告包含符合聯盟證券法的前瞻性陳述。本報告中除有關歷史事實的陳述外，其他所有陳述均為前瞻性陳述。具體而言，本新聞稿中有關行業前景和未來經營業績或財務狀況的表述均為前瞻性表述。這包括關於我們對未來的期望、信念、意圖或戰略的陳述，我們用諸如“預期”、“期望”、“打算”、“計劃”、“將會”、“我們相信”、“公司相信”、“管理層相信”等詞語或短語來表示。這些前瞻性陳述可以通過使用“相信”、“估計”、“可能”、“預期”、“預計”、“可能”、“將”或“應該”或其他變體或類似詞語來識別。不能保證前瞻性陳述預期的未來結果一定會實現。前瞻性陳述反映了管理層目前的預期，具有內在的不確定性。前瞻性陳述基於NanoViricides公司目前的預期，固有地受到某些風險、不確定因素和假設的影響，包括本報告中“管理層對財務狀況和經營結果的討論和分析”中闡述的風險、不確定因素和假設。我們的實際結果可能與這些前瞻性陳述中預期的結果大不相同。
還建議投資者參考我們之前提交給美國證券交易委員會(美國證券交易委員會)的檔案中的資訊，特別是在10-K、10-Q和8-K表格中，我們更詳細地討論了可能導致實際結果與預期或歷史性結果不同的各種重要因素。不可能預見或確定所有這些因素。因此，投資者不應認為任何此類因素清單都是對所有風險和不確定性或潛在不準確假設的詳盡陳述。
雖然這些前瞻性陳述反映了我們管理層的善意判斷，但此類陳述只能基於我們目前已知的事實和因素。前瞻性陳述本身就會受到風險和不確定因素的影響，其中許多風險和不確定因素是我們無法控制的。因此，由於各種因素的影響，我們的實際結果可能與這些前瞻性陳述中預期的結果大不相同，其中包括下文“風險因素”中列出的那些因素。對於這些陳述，我們要求1995年《私人證券訴訟改革法》中包含的前瞻性陳述的安全港的保護。您不應過度依賴這些前瞻性陳述，這些陳述僅反映了它們作出之日的情況。它們給了我們對未來的期望，但不是保證。我們沒有義務公開更新或修改任何前瞻性陳述，無論是由於新資訊、未來事件或其他原因，除非法律要求。
術語彙編
奈米當用作測量單位以外的其他東西的前綴時，如在“納米科學”中，納米意味著與納米技術有關，或以納米為單位(十億分之一米或更大)。
殺滅病毒病毒-一種可靠地停用或銷毀病毒的試劑。
納米殺病毒劑™-基於該公司正在申請專利的專有技術，將針對某一病毒或病毒家族的配體連接到納米膠束上而製成的試劑。
配基-專為識別一種特定類型的病毒而設計的短肽或化學分子片段。
膠束分子-溶液中的分子聚集體，如由洗滌劑形成的分子。
納米膠束-創造的一個術語，描述由納米病毒劑的主幹聚合物形成的膠束，而不是連接的配體。
懸掛式聚合物膠束 - 聚合物微團由化學結構使得即使聚合物的單個鏈也形成微團的聚合物形成。懸垂聚合物是一種在其骨架上具有某些單元的聚合物，這些單元延伸出從骨架分支的短鏈。因此，懸垂聚合物微團是聚合物微團材料，是一類懸垂聚合物，並且自然形成具有核殼結構的定義非常明確的、自組裝的球狀微團。
突變 - （病毒）改變其遺傳結構以避開身體自然防禦的能力。突變病毒是在宿主中複製時，通過壓力下的自然選擇過程從親病毒株中產生的。
第2頁，共106頁
P值在統計假設檢驗中，p值是在假設零假設為真的情況下，獲得至少與所獲得的結果一樣極端的結果的概率；其中，零假設的真實性表明，該發現僅是偶然的結果。P值是基於這一假設的，這一事實對於正確解釋它們至關重要。P值越小，觀察到的研究結果和比較對照不同的概率就越大，因此研究結果不僅僅是偶然的結果。
更嚴格地說，用作檢驗統計量的某個隨機變量t的觀測值的p值是在假設零假設為真的情況下兆將假設與零假設相同或更不利於零假設的值作為觀察值的概率。“更不利於零假設”在某些情況下可能意味著大於，在某些情況下小於，在某些情況下更遠離指定的中心值。
“研究用新藥申請(研究用新藥)”華盛頓-在美國，一種新藥的許可過程經歷了幾個步驟。以下是這些步驟的簡化說明。最初，公司可以提交IND前申請，尋求與美國食品和藥物管理局(FDA)會面，以獲得提交IND申請所需工作的指導。該公司在包括細胞培養和動物模型在內的各種實驗室研究中獲得關於該藥物的安全性和有效性的數據。該公司還獲得了該藥物的化學制造數據。這些數據和某些附加數據被用來創建公司向FDA提交的IND。在FDA批准IND申請後，該公司可以進行人體臨床研究。第一階段人體臨床試驗通常是為了評估藥物的安全性和最大允許劑量水準。隨後進行的第二階段人體臨床試驗旨在評估該藥物在一小部分患者中對這種疾病的有效性。之後的第三階段人體臨床試驗旨在評估更大範圍的患者群體的有效性和安全性，通常是在多個地點。然後，該公司可以提交一份NDA(新藥申請)，其中包含在臨床試驗中收集的數據。FDA可能會批准NDA。一旦NDA獲得批准，該公司就可以在美國銷售該藥物。歐洲國家在歐洲藥品管理局(EMA)下也有類似的程式。其他國家也有類似的程式。
特區--結構-活性-關係研究。當發現最初的先導藥物化合物具有活性時，對通過適當修飾它而獲得的藥物化合物進行進一步研究，以提高療效、安全性或兩者兼而有之。這樣的研究被稱為搜救研究。
第一項：業務
企業的組織和性質
公司(“公司”、“納米病毒”、“我們”或“我們”)於2005年4月1日在內華達州註冊成立，並於2023年5月30日遷至特拉華州。我們的公司辦公室位於康涅狄格州謝爾頓控制大道1號，郵編：084，電話號碼是(203)9376137。我們的網站位於Http://www.Nanoviricides.com。我們不會通過引用的方式將本網站上的資訊或可通過本網站獲取的資訊納入本年度報告，您也不應將其視為本年度報告的一部分。
2013年9月25日，公司普通股開始在紐約證券交易所美國交易所交易，交易代碼為“NNVC”。
我們是一家臨床階段的公司，我們的第一種藥物處於Ia/Ib期臨床試驗，另外幾種候選藥物正處於臨床前開發的不同階段，包括IND申請階段和啟用IND的後期非臨床研究。到目前為止，我們沒有客戶、產品或收入，可能永遠不會實現收入或盈利運營。
我們致力於將納米醫學技術應用於複雜的病毒疾病問題。我們正在開發一類藥物，我們稱之為納米病毒™，使用平臺技術。這種方法使快速開發有效的新藥來對抗多種不同的病毒成為可能。
第3頁，共106頁
納米病毒技術平臺簡介
我們是一家臨床階段的公司，正在開發(A)類比宿主的，(B)直接作用的，能夠分解目標病毒的納米機器，(C)不需要人類免疫系統的幫助。
| a. | 作為一種類比宿主的病毒，病毒不能通過在該領域產生突變和變種來逃避納米病毒藥物，因為所有的變種仍然需要我們的藥物類比的相同的簽名宿主特徵。相比之下，疫苗、抗體和小型化學藥物很容易在突變發生時被病毒逃脫，使這些醫學對策無效。 |
| b. | 作為一種直接作用的抗病毒藥物，納米病毒藥物預計不會干擾人體系統或酵素，這預計會帶來顯著的安全水準，不像大多數幹擾細胞過程的抗病毒藥物。 |
| c. | 任何引起重大病理的病毒感染都是由於宿主免疫系統失修而造成的，要麼是預先存在的，要麼是由病毒本身引起的。因此，納米病毒製劑有望優於疫苗和抗體等需要良好功能的宿主免疫系統來進行抗病毒反應的方法。 |
這些獨特的特徵使納米病毒劑有別於目前整個世界的抗病毒方法，這是通過我們新穎的納米病毒劑化學納米機械設計實現的。經過幾十年的發展，這項新穎的納米殺蟲技術現已成功進入臨床階段。
NV-387，第二階段-抗多種病毒的廣譜納米病毒藥物開發
我們的第一個臨床候選藥物NV-387最近完成了Ia/Ib期人體臨床試驗，用於評估健康受試者的安全性和耐受性。NV-387是標籤為“NV-CoV-2口服糖漿”和“NV-CoV-2口腔口香糖”的兩種藥物配方中的活性成分，這兩種藥物隨後被用於治療冠狀病毒感染。沒有人輟學。沒有報道不良事件，即使在本試驗中多次給予的最高劑量下，這些藥物也具有良好的耐受性。這些結果表明，NV-387已經成功實現了安全性和耐受性。根據受試者治療數據記錄進行的其他詳細評價正在進行中。
下一步，我們將重點開發NV-387作為治療兒童RSV感染的藥物。我們正在計劃治療成人呼吸道合胞病毒感染的第二階段臨床試驗，以在該計劃中引入兒童呼吸道合胞病毒感染的第二階段/第三階段臨床試驗。
NV-387是一種獨特的廣譜抗病毒藥物，在冠狀病毒、呼吸道合胞病毒、流感甚至天花和MPox的正痘病毒模型的致死性肺部感染動物模型研究中顯示出很強的活性。已知超過90%的人類致病病毒使用硫酸蛋白多糖(S-PG)，如硫酸乙酰肝素蛋白多糖、硫酸皮膚素、硫酸軟骨素等。NV-387模仿S-PG病毒感染人類細胞時首先登陸的基本、不變的特徵。
NV-387的這種非常廣泛的抗病毒譜讓人想起青黴素等抗生素的廣泛抗菌譜，我們相信NV-387可能會像青黴素徹底改變細菌感染的治療一樣，徹底改變病毒感染的治療方法。
青黴素等抗生素直接攻擊細菌表面，從而殺死細菌。同樣，NV-387被設計成直接攻擊病毒表面並摧毀病毒顆粒。與治療細菌感染的廣譜抗生素類似，NV-387可能是一種急需的、超廣譜、直接作用的抗病毒藥物，用於治療多種不同的病毒感染。
我們認為，一種安全有效的抗病毒藥物，一旦獲得批准，在多個不同的病毒家族中具有廣泛的廣譜活性，是一個未得到滿足的醫療需求。目前可用的廣譜抗病毒藥物，如雷米西韋、利巴韋林、西多福韋等，存在廣泛而多樣的劑量限制毒性，因此對符合條件的患者群體和臨床療效構成限制。
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NV-HHV-1，臨床可供選擇的藥物和HerpeCide計劃
我們還在開發其他幾種針對病毒家族的候選藥物。其中，作為治療帶狀皰疹皮疹的護膚霜開發的NV-HHV-1已經完成了美國食品和藥物管理局(FDA)調查新藥(IND)提交所需的非臨床安全性/藥理學研究。我們認為，NV-HHV-1護膚霜在獲得批准後，還可以根據成功的動物研究結果，額外用於治療HSV-1“脣皰疹”和HSV-2“生殖器潰瘍”。
此外，我們正在開發一種口服藥物，用於系統治療大多數皰疹病毒家族相關感染，包括HSV-1“脣皰疹”和HSV-2“生殖器皰疹性”，該藥物基於與NV-HHV-1相同的活性成分。
其他正在籌備中的藥物開發專案
值得注意的是，我們在愛滋病毒™計劃中有候選藥物，這些藥物在動物實驗中顯示出實質性的抗病毒活性，保證了進一步的臨床開發。我們還有其他幾種處於不同臨床前藥物開發階段的候選藥物正在籌備中，用於治療其他病毒感染，包括登革熱病毒、埃博拉病毒等。
完全集成的開發和製造能力
NanoViricdes是少數幾家擁有自己設施的藥物開發商之一，這些設施支持整個藥物開發過程，從設計和發現，到化學合成，到初步的抗病毒評估(在細胞培養模型中)，到感興趣的候選藥物的放大，到候選藥物物質的建立和與cGMP相容的生產，以及用於臨床試驗的藥物產品的與cGMP相容的配方、填充和成品包裝。我們在同一設施中還擁有研發開發分析實驗室以及與cGLP相容的分析實驗室。該工廠位於康涅狄格州謝爾頓的1 Controls Drive。
擁有這樣的集成設施使我們能夠在短短一年內開發出NV-CoV-2冠狀病毒藥物，從概念到完成臨床試驗所需的安全性/藥理學研究。
我們依賴外部各方(可能是合作者、顧問或分包商)對候選藥物進行監管發展，包括動物療效研究、非臨床安全性/藥理學研究、監管要求評估，以及監管事務，如關於監管策略、監管檔案、臨床試驗設計、臨床試驗申請的準備，以及進行臨床試驗和準備所需報告的建議。
強大的知識產權和合作關係
我們的基於“納米病毒”平臺的藥物基於TheraCour製藥公司(“TheraCour”)持有的幾項專利、專利申請、臨時專利申請和其他專有知識產權，我們擁有廣泛的獨家許可證。許可證針對的是整個油田，而不是特定的化合物。總而言之，我們擁有治療下列人類病毒性疾病的全球獨家許可證：人類免疫缺陷病毒(HIV/AIDS)、乙肝病毒(乙肝病毒)、丙型肝炎病毒(丙型肝炎病毒)、單純皰疹病毒(HSV-1和HSV-2)、流感和亞洲禽流感病毒、登革熱病毒、埃博拉/馬爾堡病毒、日本腦炎病毒、導致病毒性結膜炎的病毒(一種眼部疾病)和眼部皰疹性(重申)。在所有情況下，配體和聚合物材料、配方、化學和化學特性的發現以及工藝開發和相關工作(“開發活動”)將由Anil Diwan博士主要擁有的關聯方TheraCour根據各方之間各種協定的相同補償條款進行，不允許成本重複。一旦商業化，納米病毒藥物將向TheraCour支付淨銷售額的15%，儘管這些許可證沒有具體說明在臨床開發期間的里程碑付款條款，這是製藥業的慣例。此外，我們已經完善了水痘帶狀皰疹病毒感染領域的許可證(“VZV許可證”)，即帶狀皰疹和水痘感染領域的許可證(“帶狀皰疹許可證”)和另一份用於SARS-CoV-2感染治療領域的許可證(“COVID許可證協定”)；這兩份許可證就開發活動規定了與先前協定相同的條款，並進一步明確了特定於個別油田的某些里程碑式的付款條款，這些條款的細節在協定簽訂時已披露。我們後來在2024年2月12日對COVID許可進行了修訂，使得到該日期仍未賺取或未支付的任何現金里程碑付款將不會以現金支付，直到公司從其商業化活動中獲得足夠的收入，包括外包許可、合作、共同開發協定和商業化，正如COVID許可協定修正案(“對COVID許可協定的修訂”)中更全面地描述的那樣。在修訂VVID許可協定之前，根據VZV許可協定以及COVID許可協定支付了某些里程碑式的付款，細節已披露。如果在針對病毒靶標的早期研究和開發中發現了有前途的候選藥物，我們將談判並許可TheraCour的特定垂直治療應用。TheraCour在被要求時沒有拒絕任何此類許可證。
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我們與TheraCour於2024年9月23日簽署了一份諒解備忘錄(“MOU”)，自2024年9月20日起在報告期之後生效，根據該備忘錄，我們已獲得許可協定中規定的所有抗病毒藥物開發的優先購買權，包括在開發活動過程中發生的未經許可的開發，並制定了用於無許可病毒適應症的藥物的開發流程，以完成適當的許可協定。本公司和TheraCour還在本諒解備忘錄中同意，與開發活動相關的任何可授予的現金里程碑付款僅在NanoViricide具有足夠的收入時才支付，這在上文提到的COVID許可協定修正案中定義和更全面地描述，從而將以前納入COVID許可協定修正案的條款包括到所有現有和未來的許可協定中。
我們已將NV-CoV-2和NV-CoV-2-R在印度領土上用於進一步臨床藥物開發和商業化的許可授予了Karveer Meditech Pvt.Ltd.(“KMPL”)，Anil Diwan博士是該公司的被動投資者和顧問，使KMPL能夠贊助我們最初為COVID治療開發的藥物產品，即NV-CoV-2口服糖漿和NV-CoV-2口服口香糖進入第一階段人體臨床試驗。Ia/Ib期人體臨床試驗於2023年6月開始，截至2023年12月底，健康受試者治療和觀察部分完成。臨床試驗藥物產品NV-CoV-2口服糖漿和NV-CoV-2口腔口香糖是在我們位於康涅狄格州謝爾頓的園區生產的，然後運往KMPL並由KMPL接收。根據與KMPL的協定，我們將支付臨床試驗的費用，作為回報，我們將受益於將數據和報告提供給世界其他地區的監管機構備案。在KMPL在印度進行商業化後，我們將從KMPL獲得相當於向非關聯第三方銷售淨成本的70%的版稅。
NV-387是兩種口服制劑的活性藥物成分，即NV-CoV-2口服糖漿和NV-CoV-2口腔口香糖藥物產品。在各種致命性病毒感染挑戰的動物模型中，NV-387被髮現導致存活率大幅增加，甚至在可用的情況下，與批准的藥物相比，這表明了成功的臨床監管開發作為這些病毒的治療方法的潛力。在這些動物模型中研究的其他標準也進一步支持了對潛在成功的監管發展的預期。我們測試併發現的支持潛在成功監管發展預期的病毒包括RSV和流感，以及冠狀病毒，用一種藥物治療所謂的“三聯血”病毒。此外，在經皮膚途徑和直接肺部感染途徑的動物模型中，NV-387治療正痘病毒感染也發現了類似的強有力的結果。在這些動物模型研究中，皮膚感染途徑類比MPOX感染，而肺部感染途徑類比天花病毒潛在的生物恐怖襲擊。
我們的藥品監管發展和商業化計劃
在致死性病毒挑戰感染的動物模型中發現的上述NV-387的廣譜抗病毒作用表明，根據目前的數據，NV-387有資格作為RSV、流感、MPOX和天花的潛在治療藥物進行臨床開發。NV-387可能對許多其他病毒具有類似的抗病毒效果，我們計劃隨著計劃的進展繼續評估這一點。這一預期是基於NV-387的機制，即它類比與宿主細胞相關的硫酸化蛋白多糖結構，已知90%以上的人類致病病毒將其用作附著受體。
因此，我們計劃進一步開發NV-387，以規範治療患有RSV感染的兒科患者的過程，這是一種未得到滿足的醫療需求。與此同時，我們計劃繼續評估NV-387作為治療各種呼吸道病毒感染的藥物，包括由流感、冠狀病毒引起的感染，以及可能的其他呼吸道病毒，如人類偏肺病毒(HMPV)等。
擁有一種具有廣泛應用的單一藥物使我們能夠最大限度地減少監管開發工作量，最大限度地降低成本，並由於各種適應症的共同或重疊工作量而制定快速時間表。我們相信，如果NV-387實現商業化並產生收入，這將帶來強勁的商業基礎，並顯著提高投資回報。
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此外，我們擁有多年來發展起來的強大而廣泛的藥物管道。NV-HHV-1，我們作為治療帶狀皰疹的皮膚霜配方的候選藥物，已經完成了法規要求的安全性-藥理學研究，以提交該藥物的美國FDA IND。NV-HHV-1護膚霜可進一步開發用於治療HSV-1脣皰瘡和HSV-2生殖器潰瘍的適應症。此外，我們正在開發一種可能用於治療HSV-1、HSV-2以及帶狀皰疹和水痘病毒的單一全身藥物。我們的其他候選藥物正處於較早的臨床前開發階段。NV-HIV-1已經在HIV感染的標準SCID-Hu-Thy-Liv小鼠模型中顯示出抗HIV活性，我們相信這種活性足夠強大，足以保證這種候選藥物的進一步監管開發。總而言之，我們一直在研究40多種不同的病毒疾病適應症，目的是開發與現有藥物區別很好的候選藥物，如本報告下面進一步描述的那樣。
藥物開發過程漫長而昂貴。截至本報告之日，我們還沒有任何批准上市的藥物。到目前為止，我們沒有客戶、產品或收入，可能永遠不會實現收入或盈利運營。通過我們強大的內部發現和臨床開發計劃，我們繼續增加我們現有的產品組合。
我們相信，我們已經開發了幾項值得合作的資產，以促進進一步的監管開發和商業化。出於這些目的，我們尋求與我們的候選藥物合作並獲得更多許可。這種合作可能涉及向我們支付初始許可費、里程碑付款和特許權使用費，這可能會在商業產品銷售之前產生早期收入流。
我們的商業計劃是基於將候選藥物開發為監管批准，並盡可能為藥物商業化建立合作夥伴關係和分許可。我們已經通過保留總部設在伊利諾伊州的諮詢公司Aagami，Inc.開始了積極尋求合作夥伴關係的進程。Aagami主要與印度和日本的大型製藥公司以及世界各地的製藥公司開展製藥合作。隨著我們進一步開發NV-387以啟動第二階段臨床試驗，我們預計將在西方國家增加業務開發努力。第二階段臨床試驗旨在評估一種藥物的適應症的有效性，並被認為是該藥物很可能在監管部門批准的情況下在人體內的“概念證明”。在進入臨床試驗之前，我們已經在相關動物模型中開發了大量關於我們的候選藥物的“概念驗證”資訊。
我們計劃為我們的候選藥物尋求非稀釋贈款和合同資金，以回應生物防禦和大流行預防目標，特別是根據美國FDA動物規則開發治療天花的NV-387藥物。然而，不能保證我們能夠為這些專案獲得贈款或資金，也不能保證它將以對我們有利的條件進行。
不能保證我們將成功地與我們的候選藥物合作或獲得非稀釋性資金來促進我們的藥物開發計劃。如果不能建立成功的合作，我們計劃在監管批准的過程中一直依靠自己的藥物開發。我們計劃繼續通過股權融資為我們的努力提供資金，至少在與合適的製藥公司就我們的候選藥物的一個或多個適應症進行適當合作之前。
到目前為止，我們通過以股權為基礎的融資為我們的藥物開發計劃提供資金，這些融資來自出售我們在非公開和公開發行的股票，包括註冊的直接發行以及“在市場上”(ATM)發行的股票。
納米殺毒平臺技術概述
抗藥性是徒勞的：納米病毒平臺承諾抗病毒藥物，病毒即使在進化過程中也不太可能逃脫
抗病毒藥物開發中最大的“痛苦”或棘手的問題是病毒迅速進化，以逃避傳統的抗病毒方法中的疫苗、抗體和小療法。受到小型化學抗病毒藥物攻擊的酵素的微小變化會導致抗病毒藥物的耐藥性。病毒“抗原”的微小變化會導致對疫苗和抗體的抵抗力，因為這些抗病毒方法對它們所針對的抗原具有高度特異性。抗體具有極高的特異性，因此，即使病毒中的微小變化也會使抗體無效。抗體和疫苗很容易在自然過程本身的進化壓力下被病毒躲避。
我們認為，在新城疫大流行之後，這是現在的常識。
相比之下，新的納米病毒™平臺技術使病毒即使在進化過程中也無法逃脫的模仿宿主、直接作用、抗病毒的納米機器藥物。
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我們的新型納米病毒類候選藥物旨在通過模仿病毒顆粒感染宿主細胞時降落在其上的宿主側特徵，專門攻擊和分解被包裹的病毒顆粒。儘管特定病毒的表面糖蛋白在進化過程中會發生相對較大的變化，但病毒糖蛋白繼續保持並經常增強其附著到特定宿主端“附著”受體的能力，然後通過轉移到細胞上更特定的“同源受體”來進入細胞並引起感染。例如，流感病毒使用硫酸乙酰肝素蛋白多糖(HSPG)作為“附著受體”，唾液酸(或唾液酸糖蛋白)作為“同源受體”。
納米殺病毒劑模仿附著受體或同源受體，並在每個納米殺病毒劑聚合物膠束上呈現大量的病毒結合位點。此外，納米殺病毒劑聚合物膠束被設計成對病毒來說“像”一個細胞。
即使開發出逃避現有抗體和疫苗的新病毒變體，儘管病毒糖蛋白本身發生了變化，但這些變體仍在相同的位置以相同的方式繼續與它們的細胞附著受體(S)和細胞同源受體(S)結合。因此，如果我們正確地設計配體，納米殺病毒劑將繼續有效，即使病毒在現場不斷變化，這與隨著病毒進化而容易失效的抗體和疫苗形成鮮明對比。
納米殺病毒劑是一種“仿生”藥物--在病毒看來，它就像是帶有病毒結合部位的細胞表面。納米病毒殺菌劑技術可以在多個點直接攻擊病毒顆粒。由於給定病毒的宿主側或細胞側結合位點不會改變，儘管病毒發生了突變和其他變化，我們認為病毒極不可能逃脫我們的候選藥物，即使病毒在進化過程中迅速變化。
因此，我們相信，我們獨特的宿主類比方法將導致一種納米病毒藥物，即使病毒在領域中發生變化，病毒也無法逃脫，因為如果我們為納米病毒藥物設計的病毒結合配體發揮了設計的作用，它將繼續使用相同的宿主側著陸部位特徵(附著受體和/或同源受體)，儘管它自己的糖蛋白與這些特徵結合在一起。
如下文進一步描述的，納米病毒平臺提供了可導致對不會在人類中建立潛伏病毒感染的病毒的潛在治癒方法的模式。
納米病毒殺菌劑是一種納米機器，它不需要強大的免疫系統，並且在沒有宿主機器參與的情況下完成分解病毒顆粒的任務
病毒的生命週期有兩個主要部分。第一種方法是感染一種新的細胞，在病毒學上稱為“再感染”(從外部來源獲得的第一種病毒稱為“初次感染”)。第二種是在受感染的細胞內複製，製造新的病毒顆粒，然後進入細胞外的體液，稱為“複製”。大多數小型化學藥物的設計都是為了影響複製部分，並且必須進入細胞，這會引起毒性問題或降低安全邊際，因為它們幹擾了細胞機制。因此，目前幾乎所有現有的核苷/核甘酸藥物都具有不同程度的毒性。
疫苗和抗體一直被視為抗病毒醫學對策的標準支柱。疫苗產生抗體和抗體(來自疫苗或外部應用的藥物)，通過直接與病毒結合來阻止病毒，但這些對策(A)高度特異性，因此很容易被病毒逃脫，(B)需要人類免疫系統處於良好狀態。疫苗依賴於患者的免疫系統來產生新的抗體，而抗體則依賴於患者的免疫系統來適當地破壞病毒顆粒，即抗體“告訴”免疫系統“照顧這個敵人”。
相比之下，納米殺病毒劑不要求患者擁有良好的免疫系統，因為納米殺病毒劑被設計為一臺完整的納米機器，完成分解病毒顆粒的任務。這一點很重要，因為大多數免疫系統良好的人在感染病毒時，只會經歷輕微的感染，甚至可能不會注意到癥狀。免疫系統不夠活躍的人會遭受嚴重的病毒感染。此外，病毒已經進化到阻止人類免疫系統反應的各個步驟，從而一旦感染站穩腳跟，就會破壞免疫系統。
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納米殺病毒藥物的設計是通過一種新的作用機制--“再感染抑制”來降低病毒血症
與人類細胞不同，納米病毒殺菌劑在其表面暴露出非常高密度的病毒結合部位。因此，病毒更有可能被納米殺病毒劑捕獲，而不是與細胞結合。由於納米病毒劑聚合物膠束與病毒顆粒相互作用，納米病毒劑能夠在多個點與病毒結合，並在這樣做的同時，通過一種眾所周知的物理化學效應--“脂-脂混合”--將自己包裹在病毒周圍。在這個過程中，病毒用來與細胞結合的特定糖蛋白(例如，愛滋病毒gp120、呼吸道合胞病毒G蛋白、流感H和N蛋白、冠狀病毒S或“Spike”蛋白)預計將被中和和拆除。據信，這種攻擊會導致病毒顆粒在感染細胞時變得無效。
因此，我們將這種新的作用機制稱為“再感染抑制”。
納米病毒殺菌劑的設計是通過與血液中的病毒顆粒結合並從血液中清除病毒顆粒來發揮作用，就像抗體一樣，只是潛在地更好。用抗病毒的納米殺病毒劑治療病毒感染的患者有望減少病毒血症。減少病毒血症是所有病毒感染引起的疾病的一個重要目標。納米病毒殺菌劑的設計就是為了實現這一點，使用“綁定-吞噬-摧毀”策略來消除免費病毒。
重要的是要認識到，在這種抗病毒藥物應用中，靈活的、“變形”的納米病毒劑納米藥物顯示出比硬球納米粒更大的優勢，因為納米病毒劑使脂類與病毒被膜混合，並可以包裹在病毒表面或與病毒表面合併。硬球納米材料，如樹枝狀材料(樹枝狀大分子)、納米金殼、二氧化矽、金或鈦納米球、聚合物顆粒(如聚乳酸-PLGA等)等，從來沒有被設計成能夠完全包裹和中和病毒顆粒。
納米病毒平臺專為安全而設計
我們通過使用自然代謝和安全的成分創造出製造納米殺病毒劑膠束的聚合物。此外，我們連接到基礎聚合物上的抗病毒配體是使用分子建模(或“硅”設計)設計的，同時使用通常安全的化學成分和化學物質。
納米病毒聚合物結構被設計為直接攻擊細胞外的病毒顆粒。因此，我們認為，這種納米病毒藥物對細胞機制的幹擾很可能是最小的，從而比必須進入細胞並幹擾細胞過程的藥物更安全，例如大多數可用的小型化學抗病毒藥物。
我們相信，我們改善藥物安全性的方法得到了NV-387安全性和耐受性動物研究中強有力的相關結果的驗證。在大鼠單次注射的安全性/毒性評價中，NV-387的未觀察到不良反應水準(NOAEL)為1200毫克/公斤/劑量，最大耐受量(MTD)為1500毫克/公斤/劑量，這被認為是相對較高的數位。NOAEL和MTD值較高的藥物比較低值的藥物安全。
此外，在相關動物模型的非臨床GLP安全性/毒理學研究中，NV-387被髮現在大鼠的呼吸系統和神經系統研究以及非人類靈長類動物模型(食蟹猴)的心臟毒性研究中沒有出現可報告的觀察結果(即沒有不良事件)。靜脈注射NV-387對食蟹猴的心率和心電圖形態無任何毒理學影響。靜脈滴注NV-387對大鼠呼吸功能無明顯影響，對大鼠的神經藥理學和行為學也無明顯影響。在大鼠和NHP動物模型研究中，藥物治療都沒有影響體溫。所有這些結果都表明，藥物NV-387在這些動物模型中耐受性良好，從而使我們能夠獲得監管部門的批准，開始在健康受試者中進行Ia/Ib期人體安全性/耐受性研究。
納米病毒平臺使業界領先的口服納米藥物和多種給藥途徑成為可能
我們發現，與幾乎所有其他納米藥物平臺不同，我們的納米病毒劑NV-387，NV-CoV-2的活性藥物成分(API)，在多種動物模型中口服時顯示出很強的活性。大多數納米藥物不具有顯著的口服生物利用度，因此它們必須以注射或輸注的形式給藥。我們納米病毒劑的這種口服生物利用度使我們的技術有別於幾乎所有其他納米醫學世界。
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我們開發了兩種不同的NV-387口服配方，即“NV-CoV-2口服糖漿”和“NV-CoV-2口腔口香糖”。後者是一種半固體固定劑量形式。這種口服糖漿可以根據兒科治療的需要進行基於體重的劑量滴定。這兩種配方都已在NV-387的Ia/Ib期人體臨床試驗中進行了評估。
口服劑型預計將在整個人群中廣泛採用，從兒童到老年人，以及特殊情況，如醫院外的免疫受損患者。口腔口香糖固定劑型的優點是，即使是不能吞嚥通常的硬片或膠囊的患者，它也適用，因為它在吸收時在口腔中緩慢溶解。
我們還開發了一種名為NV-387注射、輸液和吸入溶液的NV-387配方。我們認為，對於尚未住院的重症患者，最好通過注射進行治療。住院患者將從注射途徑的100%生物利用度中受益最大，如果需要更大的劑量，可以使用輸液進行劑量。
重要的是，同樣的可注射溶液可以很容易地直接輸送到肺部，就像使用標準的可攜式電池驅動的霧化器設備產生的霧一樣。這使得能夠在呼吸道病毒感染的最重要部位直接和快速地採取行動，例如冠狀病毒、呼吸道合胞病毒、流感病毒、人類偏肺病毒(HMPV)、某些腺病毒和其他可能導致嚴重肺炎的病毒。
因此，納米病毒平臺的獨特多功能性使得藥物NV-387能夠以多種配方被創造出來，這種藥物可以在從兒童到健康成人再到老年患者的所有人群中使用，並可以在各種嚴重程度的疾病中使用，從家庭中的輕度到中度病例(口腔糖漿和口香糖)和門診中到重度病例(注射)，到住院重症病例(注射和輸液)，再到住院重度病例(輸液和吸入)。
納米病毒代表著超越經典免疫療法(抗體和疫苗)的下一代發展
我們的納米病毒殺滅技術依賴於複製病毒結合的人類細胞表面受體，並製造被稱為“配體”的小化學物質，這些化學物質將以與宿主側附著受體或同源受體相同的方式與病毒結合(見下文)。這些配體以化學方式連接到鹼基聚合物或“納米膠束”上，以創建納米病毒劑。
當納米殺病毒劑納米膠束“看到”病毒顆粒時，與納米膠束相關的幾個配體有望與病毒顆粒結合。一旦與病毒結合，人們認為納米殺病毒劑會將自己包裹在病毒周圍，納米殺病毒劑的內部脂鏈將合併到被包裹的病毒的脂膜中，從而破壞病毒的穩定，形成一種“納米尼龍搭扣”效應。這種攻擊預計會導致病毒用來與細胞結合並與細胞膜融合的病毒糖蛋白的損失，從而使病毒顆粒不具感染性。
存在一類稱為進入抑制物的小分子。這些藥物被設計成與病毒結合，以阻止它與細胞結合。大量這樣的小分子必須同時攻擊病毒顆粒，才能使顆粒完全被抑制--這一任務在體內的可能性非常低(“動力學障礙”)。此外，為了使小分子對病毒顆粒具有足夠的親和力，它們必須被設計成非常針對病毒糖蛋白結構。因此，隨著病毒的變化，進入抑制劑可能會迅速失效。
抗體最多隻能在每個抗體的兩個附著點與病毒顆粒結合。需要幾種抗體同時與病毒顆粒結合以中和它，而納米病毒殺菌劑預計會在多個點與病毒結合。
一種抗體要想成功地成為一種抗病毒藥物，必須結合多達10到15種抗體來飽和病毒表面。因此，成功的抗病毒抗體對病毒糖蛋白具有高度特異性，並隨著病毒的變化而迅速失效。
由此產生的抗體-病毒復合體可能會受到血液中的補體蛋白系統的影響，或者它可能會與人類免疫細胞上的抗體受體結合。因此，人類的免疫系統需要發揮作用，抗體才能作為一種“藥物”發揮作用。
從某種意義上說，抗體只是將病毒顆粒“標記”為外來的。相比之下，納米病毒殺菌劑將完成使病毒顆粒不具傳染性的工作，而不需要人類免疫系統的任何幫助。
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幾乎任何導致人類病理的病毒都能夠做到這一點，因為它已經發展出智慧和複雜的途徑，在一個或多個點上使人類免疫系統失效。這可能是許多抗病毒抗體在現場應用失敗的原因之一。此外，病毒很容易通過突變來逃避抗體，在某些情況下，還會重新分類。無論是愛滋病毒/艾滋病、2009年的流感大流行、2014-15年的埃博拉疫情，還是作為一種常年現象繼續存在的新冠肺炎，幾乎每一次病毒流行都能看到這種病毒逃避抗體的情況。相比之下，儘管有突變和其他變化，病毒不太可能逃脫針對它的納米病毒藥物的治療。
在某種意義上，納米病毒藥物對病毒的作用就像“捕蠅器”花對昆蟲的作用一樣。與給病毒貼上標籤並隨後需要人類免疫系統接管並完成摧毀病毒的任務的抗體不同，納米殺病毒劑是一種納米機器，其設計不僅可以與病毒結合，還可以完成使病毒顆粒失效的任務。
因此，納米病毒平臺技術可以被視為基於抗體的方法進化的下一步，考慮到並消除了抗體的侷限性。
藥物製造和質量控制是納米殺病毒劑設計的內在考慮
納米殺病毒劑聚合物的均一聚合物性質建恩化了納米藥物的製造品質保證
納米藥物和脂質納米粒(LNPs)領域的一個主要問題是，眾所周知，大多數納米藥物和LNPs很難以一批又一批的一致方式生產。這是因為製造大分子所固有的複雜性，聚合物和顆粒製造過程的本質，特別是在通常使用的嵌段共聚物的情況下，以及許多納米藥物，特別是LNPs是多組分的混合物。
納米病毒平臺技術從根本上進行了設計，以實現一致的製造和控制。因此，納米殺病毒劑的主幹是一種“均聚物”(即，它由單個重複單元或單體組成)，這使得結構自然均勻。這與嵌段共聚物不同，在嵌段共聚物中，沿著聚合物鏈存在結構異質性，通常難以控制和表徵。此外，納米病毒劑聚合物旨在動態和自然地在溶液中自組裝成膠束。此外，病毒結合配體以化學方式連接到聚合物上。依戀的程度可以通過我們已經開發並根據需要繼續開發的分析技術來表徵。此外，我們在聚合物加工中使用了專門的技術，以最大限度地減少內毒素或其他異物顆粒的汙染，並去除雜質。最終的納米殺菌劑溶液使用標準的膜過濾工藝進行無菌過濾。
配方在納米殺病毒劑的設計方面是固有的
自開發我們的主要臨床候選藥物API NV-387以來，其製劑、注射劑、輸液劑、吸入劑、口服糖漿和口腔膠粘劑(半固體形式)的開發相對較快，在三個月內完成，包括配方設計和擴大規模，並考慮到cGMP合規制造。同樣，自宣佈我們的帶狀皰疹臨床候選藥物NV-HHV-1以來，其作為局部治療帶狀皰疹和擴大規模的皮膚乳膏的配方，以及符合cGMP的生產在幾個月內相對快速地完成。
在納米病毒方法中，納米膠束聚合物骨架本身負責配方方面。這種納米膠束的設計是為了優化藥物的預期給藥途徑，無論是注射、護膚霜、眼藥水，甚至是口服。因此，在藥物開發期間，預計不需要具體或廣泛的配方開發。
相比之下，在正常的藥學範式下，新藥的配方開發往往需要數年時間。特別是，由於前面討論的內在複雜性，納米藥物或LNPs的配方開發通常比小型化學藥物的配方開發需要更長的時間。
因此，NanoViricides平臺從根本上進行了設計，以簡化為開發健壯、可重複和可擴展的過程而需要實施的過程和分析。
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納米病毒平臺使藥物能夠被設計成阻斷整個病毒生命週期，從而實現對非潛伏期病毒的潛在治療
納米殺病毒劑是通過化學共價將一個納米膠束-一種內部有懸掛脂鏈的球形聚合物膠束-連接到一個或多個不同的小化學配體上，這些小化學配體旨在模仿病毒結合到的細胞受體。此外，納米殺病毒劑可以攜帶額外的活性藥物成分(API)，可以選擇這些成分來影響細胞內病毒的生命週期。因此，納米病毒殺滅平臺能夠構建完整的殺死病毒的納米機器，阻止病毒進入細胞，並阻止病毒在細胞內進一步生產。
我們正在以不同的方式實施納米病毒平臺，從而產生不同類型的藥物，以應對不同病毒的不同挑戰，並使治療病毒疾病成為可能。
納米病毒藥物平臺模式1：廣譜抗病毒“再感染抑制劑”
有一些特定類別的細胞特徵是大量病毒通常用來進入細胞的。作為第一步，病毒與一種所謂的“依戀受體(S)”相結合。這使得病毒能夠集中在目標細胞附近，並使病毒顆粒能夠附著在細胞表面本身的更特定的受體上，這種受體被稱為“同型受體(S)”。一些病毒可以在沒有這種同源受體的情況下直接與細胞膜融合。
大多數病毒使用的附著受體屬於極少數家族。其中一個家族是“硫酸蛋白多糖(S-PG)”，或“糖胺多聚糖(GAG)”。我們在這個“S-PG類”中鬆散地包括了一些硫酸化的蛋白多糖類型。它們在確切的結構上有所不同，但有許多共同點。這個家族包括附著在蛋白多糖上的硫酸乙酰肝素(HSPG)、硫酸皮膚素(DSPG)、硫酸軟骨素(CSPG)或硫酸角蛋白(CSPG)。在已知的致病病毒中，超過90%的病毒與S-PG類附著受體中的一個或多個結合。這些病毒包括冠狀病毒、副粘病毒(RSV-呼吸道合胞病毒和HMPV-人類偏肺病毒)、登革病毒、皰疹病毒、人乳頭瘤病毒(HPV)、愛滋病毒、亨德拉和尼帕病毒、埃博拉和馬爾堡病毒等。
對於這些病毒中的許多，沒有抗病毒藥物可用，或者抗病毒藥物的適用性有限。類比宿主端S-PG的納米病毒有望攻擊其中許多病毒，從而實現非常廣譜的抗病毒藥物。這讓人想起從青黴素開始的β-內酰胺抗生素的發展，這種抗生素具有廣譜的抗菌特性，因為它們攻擊大量細菌的共同特徵--肽聚糖細胞壁。
據我們所知，我們的臨床候選藥物NV-387是這種廣譜抗病毒藥物的第一個例子。NV-387是利用我們在S-PG類依附受體中的共性知識設計的，用於模仿病毒用於依附的宿主側S-PG共同基序。一種開發了體現這一共同基序特徵的小化學配體，並將它們連接到鹼基納米膠束聚合物上，創建了NV-387。因此，NV-387被設計為廣譜抗病毒藥物。在成功攻擊多種無關的冠狀病毒後，我們開展了一項計劃，以擴大NV-387的潛在適應症。在NV-387的第一階段臨床試驗已經完成之後，在這項臨床試驗的最終臨床試驗報告出來之後，這些額外適應症中的任何一個的有效性都將使該適應症直接進入第二/第三階段臨床試驗。
2023年7月，我們在一項小鼠模型研究中發現，NV-387在治療NV-387後存活率增加，表明對致命的RSV感染具有抗病毒效果。隨後，在2024年5月，我們報告了在隨後的改進劑量方案的研究中，NV-387能夠使感染RSV的致死性動物完全存活，並且NV-387處理的動物的肺沒有表現出RSV引起的肺損傷。相比之下，利巴韋林治療並沒有保護被RSV感染的動物的肺，導致它們死亡，與未治療的動物相比，存活率略有增加。
2024年6月，我們報告稱，在一項致命的甲型H3N2型流感小鼠肺部感染模型研究中，發現NV-387治療顯示出存活率的增加，大大超過了使用三種著名的批准的抗流感藥物治療的增加，這是一個用於指示抗病毒有效性的參數。我們認為，這些結果表明，NV-387有望有效對抗禽流感病毒H5N1(和其他類似的H5Nx病毒)。事實上，眾所周知，高致病性禽流感(HPAI)病毒攜帶一個具有HSPG結合能力的“多鹼基位點”。因此，可以預期HPAI病毒對NV-387敏感。
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在報告的一年中，我們還報道了NV-387在與天花/Mpox(正痘病毒)感染相關的動物模型中的抗病毒活性，以相關致命病毒挑戰動物模型中存活率的增加來衡量。MPox在西方世界引起了零星的疫情，而一種更具致病性的MPOX CladeI/Ib菌株目前正在中非某些地區引發疫情，這導致世衛組織宣佈其為“國際關注的突發公共衛生事件”(PHEIC)。天花被認為是生物恐怖主義的威脅。值得注意的是，在美國被批准用於治療天花的泰可維瑪，在美國國立衛生研究院共同贊助的治療MPOX Clade 1感染(https://www.nih.gov/news-events/news-releases/antiviral-tecovirimat-safe-did-not-improve-clade-i-mpox-resolution-democratic-republic-congo).的國際臨床試驗中未能顯示出有效性。因此，我們認為評估NV-387對MPOX感染患者是否有效將是有意義的。
我們願意繼續進一步探索NV-387對許多已知利用S-PG附著受體的其他重要人類致病病毒的有效性。例如，尼帕病毒在印度和孟加拉國特別引起零星的致命性疫情。我們想要探索NV-387是否可以成為一種有效的藥物來對抗尼帕和相關的亨德拉病毒。這種擴大NV-387的使用將顯著擴大市場規模，為全球公共衛生保護提供亟需的醫療對策，並大幅提高投資回報(ROI)。
另一類重要的依附受體是唾液酸(SA)。我們正在開發模仿SA的廣譜抗病毒藥物。SA是眾所周知的流感病毒的初始結合部位，也是許多傳染性腺病毒和許多其他病毒的結合部位。
病毒很難對模仿病毒附著受體的納米殺病毒劑產生抗藥性。這首先是因為基於類比附著受體的納米病毒在自然界中是廣譜的，不僅能夠對抗特定的病毒類型或亞型、毒株或變種，而且能夠對抗整個病毒。家庭第二，因為無論病毒發生多少變異或變化，其與宿主端受體(S)的結合都不會改變。
納米病毒藥物平臺模式2：特異、高效、抗病毒的“再感染抑制劑”
選擇一種特定的抗病毒配體來類比病毒使用的宿主細胞上的同源受體，將導致特定的納米殺病毒劑，這些藥物將攻擊使用該特定同源受體的病毒。這項技術就是我們所說的通道2。
除了開發廣譜附著受體的生物類比物外，我們還開發了類位元定類型病毒使用的特定同源受體(S)的納米病毒化合物，以開發針對該類型病毒的高度特異性藥物。
我們的抗病毒藥物候選NV-HHV-1是基於模仿HSV-1和HSV-2使用的同源受體hvem(“皰疹病毒進入介體”)。在人類皮膚斑塊感染模型研究中，我們發現NV-HHV-1具有抗VZV(水痘帶狀皰疹病毒)的活性，儘管當時還不知道VZV是否使用HVEM作為同源受體。VZV在兒童和免疫功能低下的人中會引起水痘，它的重新啟動會導致成年人出現帶狀皰疹。NV-HHV-1作為治療帶狀皰疹的護膚霜已經完成了臨床前的IND使能研究。在NV-HHV-1的發展過程中，用與NV-HHV-1相同或相關的配體制備的納米病毒化合物在細胞培養研究和致死性感染動物模型研究中被髮現具有抗HSV-1的活性。由於HSV-2也使用HSV-2作為進入受體，我們認為NV-HHV-1對HSV-2也應該是有效的。除了開發NV-HHV-1用於VZV、HSV-1和HSV-2感染的適應症外，我們還計劃進一步探索NV-HHV-1對CMV和EBV等其他皰疹病毒的活性。
此外，我們已經在愛滋病毒™計劃中開發了候選藥物，它模仿愛滋病毒用來獲得細胞進入的細胞CD_4結合部位。另一個重要的HIV同源受體是CCR5。納米病毒平臺能夠使用連接到單一納米病毒藥物中的一個或多個細胞受體的類比。因此，該平臺能夠在一種納米病毒藥物上同時類比HIV的CD4結合位點和CCR5結合位點，這有望使最有效的抗HIV藥物成為可能。唯一被治癒的愛滋病毒患者是幹細胞的接受者，這些幹細胞擁有一個修飾的CCR5，而不是它的HIV結合區，這證明瞭同時模仿CD4和CCR5的重要性。
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攻擊病毒的“阿喀琉斯腳跟”--病毒與細胞上的同型受體結合的能力不變
我們努力開發與病毒結合的小化學配體，模仿病毒的同源細胞受體，使用合理的設計和分子建模策略以及我們內部積累的專業知識。有些病毒使用不止一個受體。納米病毒平臺技術允許在同一種納米病毒藥物上使用不同的配體來攻擊這些困難的病毒。
病毒很難對模仿病毒同源細胞受體的納米殺病毒劑產生抗藥性。這是因為，無論病毒發生多大程度的變異或變化，其與細胞受體的結合都不會改變。如果病毒不能有效地與納米病毒劑結合，它很可能也會失去與細胞受體有效結合的能力，導致致病性有限的減毒版本。
納米病毒平臺模式3：納米病毒平臺能夠治癒不會潛伏的病毒
到目前為止，大多數病毒感染甚至沒有有效的藥物，更不用說治癒了。
大多數病毒在人體內不會潛伏。這類病毒有一個相對簡單的生命週期：在病毒傳播給人並感染一些細胞後，它在受感染的細胞內複製(複製部分)，然後新的病毒複製離開細胞，然後感染新的細胞(“再感染”部分)，從而再次開始這個週期。如果生命週期的兩個部分都能被有效地阻斷，那麼這種病毒感染就可以很容易地被治癒。納米病毒平臺模式3使這種治療成為可能。
在這種模式下，納米病毒殺菌劑技術同時能夠攻擊外部病毒顆粒，並通過將一個或多個原料藥整合到納米病毒殺菌劑的“肚子”中來阻止病毒在細胞內的快速繁殖。據我們所知，納米殺毒劑®技術是世界上唯一一種能夠(A)攻擊細胞外病毒，從而打破再感染迴圈，同時(B)擾亂病毒在細胞內的生產，從而能夠完全控制病毒感染的技術。
使用模狀物1和模狀物2構建的納米病毒可用於以這種方式增加複製抑制能力。
我們正在開發的另一種治療冠狀病毒的藥物NV-CoV-2-R含有API NV-387-R。這種原料藥是由包裹在NV-387聚合物膠束腹部內的瑞希韋組成的。雖然NV-387被設計為在細胞外直接攻擊病毒，但已知的瑞希韋成分可以阻止病毒在細胞內的複製。通過阻斷這兩條途徑，NV-387-R將治癒病毒感染。雷米西韋是一種廣譜抗病毒藥物，已被批准用於新冠肺炎，並已顯示出對許多核糖核酸病毒的強大臨床前活性。它在血液中的快速代謝限制了它的臨床活性。NV-387將雷米希韋像瓶子一樣保持並緩慢釋放，從而限制了新陳代謝，提高了藥物動力學，從而提高了雷米希韋的有效性。
瑞美昔韋由吉列德贊助，是一種已知的抗病毒藥物，已獲得FDA對治療新冠肺炎的全面批准，並在許多國家獲得了緊急使用授權。我們正在獨立於基列德自行開發NV-CoV-2-R。
基於這種治療病毒感染的概念，我們還開發了其他藥物。其中一種藥物是NV-387-RP，它含有一種修改和改進的雷米西韋。另一種藥物是NV-387-Ribvp，它含有利巴韋林的前藥。利巴韋林是一種劇毒但高效的抗病毒藥物。它在美國被批准僅用於治療呼吸道合胞病毒感染，作為最後的藥物。然而，它被用於許多病毒感染的情況，而在嚴重的住院病例中，這些病毒感染的抗病毒藥物尚不清楚。NV-387-Ribvp有望通過結合NV-387的再感染抑制活性和利巴韋林的複製抑制活性來治癒此類病毒，同時使較低劑量的利巴韋林保持在遠低於其毒性水準。
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納米病毒平臺模式4：納米病毒平臺能夠治癒潛伏的病毒
愛滋病毒和皰疹病毒科的許多病毒在人類細胞中形成“潛伏的蓄水池”，使它們難以治癒。HIV和慢病毒類通過將其基因組資訊直接複製到人類染色體DNA本身來實現這一點。已知的兩種皰疹病毒，即HHV-6A和HHV-60億，將它們的遺傳資訊複製到染色體的端粒區，縮短了修飾細胞可以經歷的細胞分裂的數量，實際上是一種衰老現象。所有其他皰疹病毒都會在細胞核中創建上體島，而細胞核是它們自己的“工廠”，用來製造後代副本。納米病毒藥物技術平臺可以用另一種不同的方式來對抗這些病毒，這種方式可能會產生治癒方法。我們正致力於在我們的研發(R&D)專案中治療潛伏病毒。
基於納米殺毒平臺技術的寬廣擴展管道--簡而言之
我們強大的納米病毒平臺技術使我們能夠針對大量不同的病毒開發出幾種候選藥物，這些候選藥物可以進一步改進為臨床候選藥物，從而建立了一個非常廣泛的藥物管道，一旦我們的第一個候選藥物獲得批准，可能會導致公司的指數級增長。雖然我們的第一個候選藥物NV-387目前正在進行人體臨床試驗，另一個候選藥物NV-HHV-1正在等待進入臨床，但在過去的幾年裡，我們已經開發了十多個候選藥物，我們相信，這些候選藥物可以迅速進入臨床階段，用於近40種不同的抗病毒藥物開發計劃。我們在臨床上的進展受到我們資源的限制。我們預計，一旦我們的第一種藥物成功通過第一階段和第二階段臨床試驗，從而證明我們的能力和我們的納米病毒平臺技術，該公司假設它獲得了必要的融資，可能會進入指數增長和更多候選藥物的快速臨床開發階段，從而改變治療病毒感染的方式。
我們有幾種藥物正在研發中，這得益於我們強大而廣泛的納米病毒技術平臺。其中，NV-387正處於Ia/Ib階段臨床試驗，其中健康受試者的治療和觀察階段大約在2023年12月底完成，我們現在正在與CRO和臨床試驗經理KMPL一起進行數據分析和第一階段報告。
我們現在正在計劃一項第二階段的臨床試驗，以評估使用NV-387治療RSV感染的療效。我們正專注於RSV適應症，以期監管部門批准使用NV-387治療患有RSV感染的兒童患者。
我們還計劃進一步開發NV-387，用於治療天花/Mpox，作為一種生物防禦應用。我們計劃將天花相關工作的重點放在為這一髮展提供非稀釋性資金上。
我們計劃進一步探索NV-387作為流感治療藥物在非臨床療效研究中的使用，這可能是監管IND第二階段應用所必需的。
此外，我們認為NV-387可能對許多其他病毒有效，包括目前沒有治療方法的病毒，如亨尼帕病毒(亨德拉病毒和尼帕病毒)，許多國防部感興趣的出血性病毒，以及其他病毒。NV-387類比硫酸基蛋白多糖，90%以上的人類致病病毒利用這種蛋白多糖作為引起感染的第一個著陸部位。我們計劃尋求與能夠廣泛測試我們的藥物對抗多種病毒的實驗室的合作，以及為此類開發提供非稀釋性資金。
我們還完成了一種展示方式2的納米病毒藥物的臨床前開發，即NV-HHV-1。我們計劃在財力允許的情況下，進行NV-HHV-1的第一階段和進一步的臨床開發。NV-HHV-1目前是一種治療帶狀皰疹的護膚霜。
我們還有幾個額外的臨床前藥物開發計劃，包括單純皰疹病毒(引起脣皰疹的單純皰疹病毒和引起生殖器潰瘍的單純皰疹病毒-2)、愛滋病毒/艾滋病、流感、登革病毒和埃博拉/馬爾堡病毒，我們計劃隨著臨床候選藥物的進一步發展而進一步推進這些計劃。因此，我們有一個強大而廣泛的渠道，預計將繼續產生針對一些病毒性疾病的高效候選藥物。
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我們現在正處於臨床利用第一和第二模式納米病毒藥物的開發階段。簡而言之，第一種藥物模仿附著受體，並具有非常廣泛的抗病毒活性，其中包括大量不同類型的病毒。模式2藥物模仿同型受體，對一組特定類型的病毒具有非常強的抗病毒活性。在這兩種情況下，靶向病毒都不太可能通過進化的變種逃脫藥物。NV-387是一種二期臨床候選藥物，是第一形態納米病毒的一個例子，而NV-HHV-1是第二形態納米病毒的一個例子。我們正在完成使NV-387能夠進入治療RSV的第二階段臨床試驗的IND研究過程中。NV-HHV-1已經完成了作為治療帶狀皰疹的護膚霜的IND研究。
我們還在繼續研發modality 3納米病毒藥物，這些藥物有望治癒非潛伏期病毒。NV-387-RP和NV-387-Ribvp分別在動物模型中顯示了對冠狀病毒和RSV的強大效果，基於其已知的成分活性，預計對其他一些病毒具有高度的活性。我們計劃開發這些模式3潛在的治療一些病毒性疾病的藥物後的模式1和模式2的藥物。
總體而言，自我們成立以來，我們在許多藥物開發計劃中致力於開發約40種不同病毒疾病的不同適應症。在這個過程中，我們建立了一個廣泛的庫，包括(I)納米病毒平臺技術和(Ii)實際合成化學藥物。
有關我們的藥物流水線的更多詳細資訊，請參閱本年度報告“納米病毒藥物流水線”一節。
納米病毒藥物開發過程
我們的藥物專案從最初的研發開始，瞭解病毒，並進一步設計抗病毒的醫學對策。然後，我們通過化學合成選擇潛在的小分子作為類比模式1(廣譜)型以及模式2(病毒家族特異性)的細胞受體(S)的配體，與病毒結合。另外，我們一直致力於發展和優化各種版本的納米殺病毒劑主幹聚合物。然後，我們選擇一些選定的聚合物，並將選定的抗病毒配體化學地連接到聚合物上，以創建抗病毒納米病毒劑庫。然後，我們在細胞培養中評估這些抗病毒藥物對目標病毒的作用。我們在動物模型研究中進一步評估了從該篩選中挑選出的抗病毒配體。然後，我們從有效的候選藥物中選擇大約5到7個候選藥物進行進一步開發，考慮因素包括活性的水準(或效力)和光譜、任何可能的安全性/耐受性問題、藥物穩定性、藥動學、藥效學、製造的簡易性、配方的簡易性和所需的給藥途徑。
一路上，我們改進了這些候選藥物的製備方法，從化學合成一直到最終藥物產品的配方和包裝，開發和實施藥物化學、製造和控制資訊系統，為所產生的藥物物質以及潛在的藥物產品提供資訊。
然後，被選中的候選人將接受額外的學習。通常，其中大約有兩個人進入了IND-Enabling GLP安全性/耐受性研究。然後選擇其中一種在人體臨床試驗中進行進一步評估。
納米病毒公司是一家完全整合的製藥公司
我們努力將藥物開發過程中固有的風險降至最低。主要風險之一是以生產質量穩定的藥物的方式生產我們的納米殺蟲藥物候選藥物。
具有c-GMP能力的納米病毒藥物物質和藥物製品的千克級製造設施
供銷售的藥物產品以及後期臨床試驗的製造必須在FDA註冊的cGMP製造設施中進行。生產用於早期臨床試驗以及IND-GLP安全/毒理學研究的藥物需要以符合c-GMP的方式進行。
我們在開發早期就發現，製藥業現有的合同製造業務對我們這類藥物適用的專業知識非常有限。為了加快納米病毒藥物的開發，節約成本，保證質量，我們建立了自己的製造設施，可以從幾克的發現數量到幾公斤的臨床試驗數量。
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我們相信，我們是極少數擁有自己的cGMP或cGMP能力的小型藥物創新者之一。通過我們位於康涅狄格州謝爾頓的園區和具有cGMP能力的中試生產設施，我們現在已經證明，我們能夠迅速將我們的候選藥物推向臨床試驗，生產臨床前的“毒素包”批次，臨床藥物物質批次，以及完整的成品和包裝的臨床藥物產品批次。
我們已經生產並計劃繼續生產我們的納米殺病毒劑藥物，用於在該設施進行臨床試驗。我們有能力在一批生產中為大約1000名患者生產足夠的藥物，具體取決於劑量。這一生產能力預計將足以用於治療呼吸道合胞病毒的NV-387臨床試驗，以及治療帶狀皰疹的NV-HHV-1護膚霜的預期臨床試驗。此外，這種符合cGMP的製造能力預計足以在獲得所需的監管批准後將我們的RSV候選藥物商業化，從而實現快速進入市場和創造收入。
我們的符合cGMP標準的製造設施配備了適用於注射劑和其他製造操作的1100級(ISO 5)、11000級(ISO 6)和110000級(ISO 7)潔淨室套件。
我們擁有以下形式的藥物產品配方、灌裝和加工所需的所有能力：(I)口服糖漿，(Ii)口腔膠(半固體形式)，(Iii)護膚霜和(Iv)軟膏。我們計劃根據需要，為用於臨床試驗的注射藥物產品聘請外部合同製造組織(CMO)，或利用我們的10,000類套件開發內部注射藥物製造能力。
我們相信，我們遵守與我們的產品製造有關的所有物質環境法規。
納米病毒-最先進的納米藥物表徵實驗室支持過程中的質量控制、製造的藥物物質、藥物產品的釋放測試以及研發
我們在同一園區擁有最先進的納米藥物表徵設施，具備對我們的藥物產品進行過程中質量控制、釋放測試和品質保證以及支持我們的製造業務和研發業務所需的所有能力。我們還有一個生物分析實驗室，用於各種定量和半定量分析。
用於細胞培養研究中候選藥物評估的納米病毒BSL2病毒學實驗室
除了具有cGMP能力的製造設施外，我們還在內部引入了在細胞培養研究中測試我們的納米病毒候選藥物對抗多種病毒的能力，以便進行早期評估。我們在康涅狄格州謝爾頓的校園裡建立了生物安全二級(BSL2)病毒學實驗室，具有附帶的細胞培養和生化能力，並獲得了康涅狄格州的認證。我們能夠在細胞培養中同時對多種不同的病毒進行藥物有效性和安全性研究，在這個設施中，在隔離的實驗室裡。
我們還可以在這個設施中研究針對某些BSL3和BSL4病毒的抗病毒藥物，方法是開發所謂的“假病毒粒子”。假病毒粒子是不能複製的病毒顆粒，但具有我們想要研究的病毒的表面糖蛋白(例如H5代表H5Nx禽流感，GP代表埃博拉，馬爾堡，S代表SARS-CoV-2等)。在病毒骨架上，這是一種BSL2相容病毒。我們只需要和使用偽病毒技術，在這種情況下產生的病毒顆粒不能複製。偽病毒系統允許評估阻止病毒顆粒進入細胞的候選藥物，如進入抑制劑、抗體和納米病毒。
我們開發了內部細胞培養篩選能力，用於開發針對人類冠狀病毒(h-CoV)的候選藥物，包括SARS-CoV-2偽病毒粒子、VZV、HSV-1和HSV-2、流感病毒、HIV、RSV、鼠痘病毒(MPox和天花病毒的模型)以及針對埃博拉/馬爾堡病毒的偽病毒技術。我們認為，這種內部篩選能夠對比外部合作所允許的更多數量的候選人進行快速評估。我們相信，這大大提高了我們尋找高效配體並在短時間內進行結構-活性-關係研究的能力。
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GLP和非GLP動物模型研究、監管事務支持和臨床試驗的外部CRO
我們依賴外部合作者和合同研究組織(“CRO”)進行我們的所有動物研究，包括GLP和非GLP實踐中的抗病毒療效研究、安全性和耐受性研究。我們還依賴外部合作者和CRO來完成我們的監管備案，設計合適的臨床方案，以及進行人體臨床試驗，匯編結果數據，生物統計學評估，以及準備監管備案報告。我們計劃在不久的將來將一些監管事務能力引入內部，以加快我們的監管進程。
校園納米病毒-全資擁有的資產集團
上述所有設施，包括土地、建築、改善和設備，均由納米病毒公司全資擁有。這構成了我們長期資產的一個重要而穩定的部分，截至2024年6月30日，折舊和攤銷後的長期資產超過7.5億美元萬。第三方顧問在2024年4月估計這些資產的重置成本為1,800美元萬，我們認為這是一個低端的估計。
我們相信，NanoViricdes，Inc.是為數不多的以創新為主導的小型製藥公司之一，這些公司已經或即將擁有從藥物發現到藥物產品製造的完全集成的製藥業務。這大大降低了我們的開發計劃的風險，並在新藥開發過程中節省了時間和成本，從而使我們在該領域脫穎而出。
回顧2024財年
在2024財年，我們取得了實質性的成就。我們重點評估了NV-387的廣譜抗病毒活性。我們已經能夠顯著擴大病毒感染的潛在適應症，其中NV-387可能是一種值得臨床試驗的候選藥物，除了冠狀病毒外，還包括呼吸道病毒感染RSV和流感，以及天花/MPOX。研究結果摘要如下：
NV-CoV-2期Ia/Ib期人體臨床試驗；最新狀況
NV-387是在冠狀病毒大流行期間以非常快的時間框架開發出來的。在大約一年的時間裡，我們從設計和合成到2021年1月至2021年完成了所需的非臨床GLP安全藥理學研究。進展放慢的主要原因是缺乏內部監管專業知識和對外部顧問的依賴。2022年9月左右，我們成功地完成了兩種含有相同API NV-387的口服藥物產品(即NV-CoV-2口服糖漿和NV-CoV-2口香糖)的臨床試驗申請，該申請由我們的被許可人、合作者和臨床試驗經理Karveer Meditech Pvt.Ltd.(KMPL)發起，KMPL與當地的CRO一起贊助了該藥物，並於2023年1月底獲得了臨床試驗的監管許可。
Ia/Ib期臨床試驗始於2023年6月的第一次人體劑量。臨床試驗的健康受試者部分，包括Ia階段-單一上升劑量-健康受試者，和Ib階段-多個上升劑量-健康受試者，完成了最後一名受試者在2023年12月左右出院。沒有中途輟學，也沒有不良事件報道。在臨床試驗中，這些結果通常被認為是藥物在治療條件下耐受性良好的指標。
這項Ia/Ib期健康受試者部分臨床試驗的結果與在多種動物模型上的非臨床研究結果一致，在這些動物模型中，觀察到良好的耐受性，沒有發現呼吸、心臟或神經生理影響。
這項臨床試驗的臨床試驗申請是在新冠肺炎大流行期間提交的，為了便於在大流行中使用該藥物，還提議在治療新冠肺炎NV-387患者的臨床試驗中單獨設立一個部分。在完成了健康主題部分後，贊助商和CRO經過了巨大的努力，獲得了監管部門的許可，在2024年1月期間又增加了一個正在掀起新冠肺炎熱潮的網站。然而，當開始招生所需的所有審批都完成時，新冠肺炎的浪潮已經完全消失了。在對潛在的呼吸道癥狀受試者進行了大量的RT-PCR測試後，所有測試都顯示SARS-CoV-2呈陰性結果，第二部分臨床試驗被取消，原因是儘管增加了第二個網站，但仍無法找到患者登記。第二個網站隨後在2024年4月/5月左右關閉。
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同時，健康受試者第Ia/Ib階段的數據上傳和交叉核對活動現已完成。經過適當的外部審計，藥物贊助商現在準備關閉第一個臨床試驗地點，在那裡執行健康受試者的部分。此後，在資料庫鎖定之後，將對受試者的觀察結果進行統計分析。這些參數包括一些參數，包括臨床觀察、血液化學和特定器官相關的血液化學參數等。這些研究的報告將由CRO匯編成最終的Ia/Ib期臨床試驗報告。
印度相關監管機構已經通過了與非物質文化遺產臨床試驗指南一致的指南。(ICH=國際人用藥品技術要求協調理事會)。因此，我們認為印度的臨床試驗也適用於美國FDA的監管目的。我們注意到，該臨床試驗不是在美國FDA監管批准下進行的。我們計劃與美國FDA就NV-387用於治療兒科患者的RSV感染舉行IND前會議，討論這項臨床試驗和從中獲得的數據是否適合進入第二階段臨床試驗，目的是評估NV-387治療RSV感染適應症的療效。
評價NV-387對多種不同類型病毒的廣譜抗病毒活性
在報告的一年中，在印度進行臨床試驗的同時，我們開始確定NV-387是否具有足夠的活性，可以被選為對抗冠狀病毒以外的不同類型病毒的臨床候選藥物。
NV-387被設計為一種硫酸蛋白多糖(S-PG)類比物。已知90%以上的人類致病病毒使用硫酸乙酰肝素蛋白多糖(HSPG)作為附著受體，使它們能夠感染細胞。NV-387不僅在熱休克蛋白G中模仿病毒尋找的關鍵特徵，而且在其他相關的S-PG中模仿病毒的關鍵特徵，如硫酸軟骨素(由基肯古雅病毒使用)、硫酸皮膚素(由人乳頭瘤病毒使用)等。幾乎所有呼吸道病毒都使用HSPG。因此，在我們的第一次研究中，我們把重點放在了使用HSPG的病毒上。特別是，我們研究了NV-387在呼吸道病毒RSV和流感致死性肺部感染動物模型中的活性。由於正痘病毒已知與HSPG結合，我們還評估了NV-387對模型鼠痘病毒(濕疹)的致死性感染的活性，該病毒被用作美國FDA動物規則的一部分，用於開發和批准天花療法。
NV-387在小鼠致死性肺部呼吸道合胞病毒感染中的活性口服治療基於完全存活和無肺損傷，似乎已經治癒了致死性肺部RSV感染
在第一個動物試驗中，我們比較了NV-387注射和口服治療對感染RSVA2病毒的小鼠的致死性感染的效果。我們發現，NV-387表現出優異的抗RSV活性，幾乎與利巴韋林的活性相當，如下表所示。利巴韋林是目前唯一被批准用於治療呼吸道合胞病毒感染的藥物。然而，它只被用作最後的藥物，因為它有明顯的毒性，包括血液學和腎臟(腎臟)的不良反應。
致死性感染小鼠的存活壽命 -呼吸道合胞病毒A2的肺部感染 | |||
|---|---|---|---|
治療 | 存活天數 | 生存能力的提高， | 增加 |
NV-387，注射劑 | 15 | 8 | 115% |
病毒唑，注射劑 | 16 | 9 | 129% |
注射用溶劑 | 7 | 0 | - |
NV-387，口服 | 15 | 8 | 115% |
核苷，口服 | 16 | 9 | 129% |
口服溶劑 | 7 | 0 | - |
在這項研究中，用NV-387或病毒唑治療致命感染小鼠，對疾病結局產生了統計學上等效的積極影響。由於病毒唑具有劇毒，因此本研究中證明的NV-387的活性具有重要意義。
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重要的是，口服NV-387的劑量大約是注射NV-387總劑量的兩倍，在動物存活方面產生了同樣的效果。因此，根據這項動物研究，根據實際的生物學效應，可以估計NV-387的口服生物利用度約為50%。我們相信，這種有效的生物利用度是極好的，它將使NV-387成為治療呼吸道合胞病毒感染的口服藥物。
我們在2023年7月11日的新聞稿中報道了這項研究。
受到這一動物試驗結果的鼓舞，我們啟動了一項新的試驗，將NV-387的口服劑量延長至10天，第一天兩劑，共11劑。在第二次動物試驗中，我們還增加了利巴韋林的劑量。這次試驗的結果如下表所示。
致死性感染小鼠的存活時間--呼吸道合胞病毒A2肺部感染 | |||||
|---|---|---|---|---|---|
治療 | 存活天數 | 生存能力的提高， | 生存能力的提高， | ||
NV-387，口服 | 22+(完整) | > | 14 | > | 175% |
口服利巴韋林 | 14 | 6 | 75% | ||
車輛，口述 | 8 | 0 | 0% | ||
我們驚喜地發現，NV-387口服劑量的增加導致了所有肺部RSV致命感染的小鼠完全存活，遠遠超過了21天的研究長度，它們一直保持健康，直到按照協定在30天時最後犧牲。口服利巴韋林的表現與前一次試驗中的表現相似，可能略差，這表明這次試驗中利巴韋林的劑量水準可能接近證明其毒性。
我們在2024年5月14日的新聞稿中報道了這些結果。
與利巴韋林相比，用NV-387治療的動物的肺的大體組織學和微觀組織病理學也進行了進一步的分析。
NV-387治療組的致死性RSV感染動物在研究期間的所有時間點，包括研究結束時，在肺組織病理學研究中都沒有顯示出肺損傷。這表明NV-387口服治療完全保護了動物免受RSV感染的致命影響。這些結果與動物的完全和健康生存是一致的。
相反，利巴韋林口服治療組的致死性感染動物表現為進行性肺部病理，第10天時肺組織呈進行性炎症，導致中度炎症和炎性細胞浸潤，第13天時增加到嚴重感染的肺泡炎和嚴重肺炎。利巴韋林治療RSV感染組動物在第14天全部死亡，如表所示。
這些肺組織病理學結果以及NV-387口服治療動物的完全存活支持了我們的信念，即在這項動物試驗中，NV-387口服治療導致了小鼠致命的RSV感染完全治癒。
我們在2024年5月20日的新聞稿中報道了這些結果。
基於這些結果，我們決定尋求監管部門批准進行第二階段的人類臨床試驗，以評估口服NV-387治療呼吸道合胞病毒感染的療效。
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NV-387在小鼠致死性肺部流感感染中的活性與三種已批准的流感藥物相比，NV-387治療顯著提高了小鼠的生存能力，並顯著增強了對肺免受病毒誘導的損害的保護
我們評估了NV-387的活性(第一天口服兩次，然後每天一次，共8天，共9劑)，並與三種已獲批准的藥物奧司他韋(達菲®，羅氏)、巴洛沙韋(Xoflza®，希諾吉，羅氏)和帕拉米韋(拉皮瓦®，生物晶體)每天一次，連續8天尾靜脈注射進行比較。生存壽命結果如下表所示。
致死性感染小鼠的存活時間--甲型H3N2型流感肺部感染 | |||
|---|---|---|---|
治療 | 存活天數 | 生存能力的提高， | 生存能力的提高， |
NV-387，口服 | 15 | 7 | 88% |
奧司他韋(達菲)，口服 | 10 | 2 | 25% |
帕拉米韋(拉米夫)，注射用 | 11 | 3 | 38% |
巴洛沙韋(Xoflza)，口服 | 11 | 3 | 38% |
車輛，口述 | 8 | 0 | - |
我們驚喜地發現，與三種批准的藥物相比，NV-387口服治療導致的存活率增加了近2.5%到3倍，增加了7天，而三種批准的藥物導致的存活率只比用賦形劑治療的動物存活了8天，只有2到3天。
我們在2024年5月6日的新聞稿中報道了這些結果。
在動物實驗中，我們還研究了NV-387治療對肺黏液指數和肺免疫細胞浸潤的影響。肺黏液指數是衡量肺充血程度的參數，與肺炎症狀有關。肺免疫細胞滲透與病毒引起的肺損傷有關，這種損傷實際上是由免疫系統的細胞毒細胞殺死感染細胞造成的。結果如下表所示。
NV-387口服液對Balb-c小鼠的肺保護作用 | ||
|---|---|---|
治療 | 肺黏液指數 | 免疫細胞浸潤率 |
NV-387，口服 | 53 | 31% |
未經治療的感染控制 | 138 | 68% |
我們發現，NV-387顯著降低了肺黏液指數，以及細胞殺傷性免疫細胞向肺內的滲透。結果表明，口服NV-387可明顯減少小鼠肺組織浸潤和肺細胞死亡。經NV-387口服治療的受感染動物的肺部顯示，除了病毒本身引起的受感染細胞死亡造成的直接肺損傷外，滲透中的細胞殺傷免疫細胞的存在非常有限，而這些細胞殺傷免疫細胞被認為是造成肺損傷的重要原因。此外，經NV-387型兆治療後，整體肺損傷明顯減輕。
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The results further indicated that NV-387 treatment resulted in significant reduction in mucus load in the lungs. The extent of mucus in the lung tissue was substantially reduced in the case of NV-387 treatment a positive finding. The mucus index value in the case of NV-387 oral treatment was about 53, as compared to the infected untreated animals that had a mucus index value of 138. Mucus is secreted by secretory cells in response to viral infection in an attempt to clear the virus, but it results in reduced lung capacity and eventually can lead to pneumonia. Thus, reduction in mucus load is an important sign that the progress of the viral infection is arrested.
These results indicate that NV-387 treatment led to a significant level of protection of lungs in Balb-c mice lethally infected with Influenza A H3N2 virus.
We reported on these results in a press release on June 20, 2024.
Given the broad range of activity of NV-387 against different types of viruses, we believe that these results of activity of NV-387 against Influenza A/H3N2 lead us to believe that NV-387 likely possesses significant activity against other influenza viruses as well, including high path avian influenza (HPAI; H5Nx Bird Flu).
It is important to note that resistance against small chemical influenza drugs has emerged. The amantadine class of drugs is now largely ineffective. Oseltamivir resistant mutants are known. Peramivir is not used very much for various reasons. In a Phase III clinical trial of baloxavir, over 10% of the patients were found to have the virus evolved into resistant mutants.
Thus NV-387 with its broad spectrum and unlikely escape of virus is expected to become an important weapon in the treatment of influenza virus infections.
Activity of Oral NV-387 in Lethal Intra-digital Poxvirus Infection in Mice Matched that of Approved Drug Tecovirimat; Activity of Combination of NV-387 and Tecovirimat was Significantly Better than Either Drug Alone
We conducted evaluation of activity of NV-387compared to the approved drug tecovirimat (TPOXX®, SIGA) in a lethal model of mousepox (ectromelia) virus intra-digital footpad infection in mice. This model emulates the virus infection by transfer of virus via skin abrasion, a mode of infection that has been found to be the dominant mode in Mpox virus epidemics in the West. The results are shown in the table below.
Survival Lifespan of Lethally Infected Mice – Intra-digital Footpad Infection with Ectromelia Virus | |||
|---|---|---|---|
Treatment | Survival, Days | Increase in Survival, | Increase in Survival, |
NV-387, Oral | 14 | 6 | 75% |
Tecovirimat (TPOXX), Oral | 14 | 6 | 75% |
NV-387-m-T, Oral | 17 | 9 | 112% |
Vehicle, Oral | 8 | 0 | - |
In this trial, we found that the activity of NV-387 matched that of tecovirimat, the approved drug for smallpox which was used in the recent MPox epidemics in the West. Both drugs led to approximately 75% increase in survival of the animals. Moreover, treatment with an oral co-formulation of NV-387 and tecovirimat together developed by us (that we call NV-387-m-T, “m” for “mixed-in”), led to a significantly increased survival improvement of about 112% compared to either drug given alone.
We reported on these results in a press release dated November 14, 2023.
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Activity of Oral NV-387 in Lethal Lung Poxvirus Infection in Mice Matched that of Approved Drug Tecovirimat; Activity of Combination of NV-387 and Tecovirimat was Significantly Better than Either Drug Alone
We also conducted evaluation of activity of NV-387 compared to the approved drug tecovirimat (TPOXX®, SIGA) in a lethal model of mousepox (ectromelia) virus lung infection in mice. This model emulates the virus infection that would be caused in the case of aerosolized virus, a mode of infection likely in a potential bio-terrorism attack, and that was also observed in natural smallpox epidemics. The results are shown in the table below.
Survival Lifespan of Lethally Infected Mice – Intra-digital Footpad Infection with Ectromelia Virus | |||
|---|---|---|---|
Treatment | Survival, Days | Increase in Survival, | Increase in Survival, |
NV-387, Oral | 15 | 7 | 88% |
Tecovirimat (TPOXX), Oral | 16 | 8 | 100% |
NV-387-m-T, Oral | 19 | 11 | 138% |
Vehicle, Oral | 8 | 0 | - |
In this trial, we found that the activity of NV-387 substantially matched that of tecovirimat, the approved drug for smallpox which was used in the recent MPox epidemics in the West. Both drugs led to approximately 85-100% increase in survival of the animals. Moreover, treatment with an oral co-formulation of NV-387 and tecovirimat together developed by us (that we call NV-387-m-T, “m” for “mixed-in”), led to a significantly increased survival improvement of about 138% compared to either drug given alone.
We reported on these results in a press release dated May 8, 2024.
Smallpox, Biodefense, and the US FDA Animal Rule
Tecovirimat (“TPOXX®”, SIGA Pharmaceuticals) is an approved smallpox therapeutic. It was mobilized from the US Government stockpile for the treatment of Mpox infection during the recent MPox epidemic. Additional therapeutics that work with Tecovirimat such as NV-387 may reduce the required dosage and dosing period enabling rapid patient recovery.
Smallpox-causing Variola virus is considered a significant biodefense threat. While smallpox vaccines are available, their general public health usage has stopped after Smallpox was declared eradicated in 1980, leaving persons under the age of about 45 vulnerable.
Tecovirimat is stockpiled by the Biomedical Advanced Research and Development Authority (BARDA) under Project BioShield. BARDA awarded an original development and procurement contract worth approximately $435 million to SIGA in 2011, followed by another procurement contract in 2018 upon regulatory approval worth approximately $629 million. SIGA announced in July 2023 that it has received new procurement orders of approximately $138 million for TPOXX from the U.S. Government.
There is significant interest in the development of a smallpox therapeutic drug that works well by itself, as well as in combination with the known drug, tecovirimat. Tecovirimat has a low barrier of virus escape - a single mutation in one protein can enable the virus to escape this drug, adding to the significance of additional smallpox drug development.
Since human clinical trials are not feasible for the deadly Variola virus, infection of the related animal viruses in their native species is used for evaluation of drug effectiveness under the FDA “Animal Rule.” Variola (Humans), Mpox (Monkeys), Ectromelia (Mice), and Rabbitpox (Rabbits) are some of the closely related pathogenic viruses belonging to the Orthopoxvirus genus (with their native hosts listed in parentheses).
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The animal-rule based efficacy studies conducted under GLP conditions substitute for the usual Phase II/III human clinical efficacy trials for regulatory approval under the Animal Rule. Additional human safety clinical studies are expected to be required.
The Animal Rule pathway may enable rapid regulatory development of NV-387 as a smallpox therapeutic towards approval.
The Importance of Treatment for RSV Infection in Pediatric Population – An Unmet Medical Need
Each year in the United States, an estimated 58,000–80,000 children younger than five years old are hospitalized due to RSV infection. Globally, RSV is a common cause of childhood Acute Lower Respiratory Infection (ALRI, which includes pneumonia) and a major cause of hospital admissions in young children. Globally in 2015, 33 million episodes of RSV-ALRI, resulted in about 3.2 million hospital admissions, and 59,600 in-hospital deaths in children younger than five years. About 45% of hospital admissions and in-hospital deaths due to RSV-ALRI occur in children younger than six months old.
There are No Effective Treatments for RSV
Three vaccines have recently been approved for RSV prophylaxis. Arexvy (GSK), and Abrysvo (Pfizer) were approved in May 2023 for use in adults over 60 years of age and both reduced severity of RSV infection. Mresvia (Moderna), an mRNA vaccine, was approved for medical use in the United States in May 2024. Abrysvo also received approval for use by pregnant women at 32-36 weeks of pregnancy in order to confer protective antibodies against RSV to the fetus for protection of infant when born despite concerns regarding premature childbirths. There are no RSV vaccines currently approved for infants and children.
However, there are no effective therapeutics for RSV to date. Ribavirin is conditionally approved only for patients with high risk of progressively severe RSV disease, due to significant side effects including hemolytic anemia and kidney failure. Synagis (palivizumab), an antibody, is approved only as a prophylactic in children and infants at high risk of severe RSV infection, but it is not approved for treatment of RSV infection. Nirsevimab (Beyfortus, AstraZenecka), another antiviral monoclonal antibody, has been approved for the prevention of RSV lower respiratory tract disease in newborns and infants during their first RSV season that requires a single dose to confer season-long protection from RSV infection. None of these drugs are approved for treatment of RSV infection after it occurs.
Market Size of RSV Therapeutics is Expected to Hit $8.73 Billion by 2031
In June 2023, GrowthPlus Reports reported that the market size for RSV therapeutics was worth $1.8 billion in 2022, and is expected to grow at a CAGR of 18.9%, reaching $8.73 billion by 2031 (https://www.growthplusreports.com/report/respiratory-syncytial-virus-rsv-therapeutics-market/8519).
NV-387 for the Treatment of Influenza Infections
The market size for Influenza and Bird Flu is estimated at $4.6 billion in 2024, growing to an estimated $5.9 billion in three years, at a rate of 8.5% as reported by DelveInSight (https://www.delveinsight.com/report-store/influenza-a-infections-market? utm_source=cision&utm_medium=pressrelease&utm_campaign=spr). In case a pandemic occurs, reality may outrun such projections by magnitudes, as was seen with the COVID pandemic.
Strong Market Potential of NV-387
Thus, we believe NV-387 alone may propel NanoViricides towards great success in a near-term horizon. We plan to license or co-develop our various drug candidates against multiple viral diseases to other Pharma Companies. In addition, we plan to seek non-dilutive funding for the development of drugs that are of interest for biodefense.
Our IND-Ready Drug Candidate, NV-HHV-1 Skin Cream for the Treatment of Shingles
We have previously developed NV-HHV-1 and formulated it as a skin cream for the treatment of Shingles rash, NV-HHV-1 has completed IND-enabling studies. We plan on undertaking further development of NV-HHV-1 into human clinical trials once our NV-387 based drug candidates progress further in clinical trials.
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Licenses, Patents, Trademarks, Proprietary Rights: Intellectual Property
Licenses from TheraCour
Our drug development business model was formed in May 2005 with a license to the patents and intellectual property held by TheraCour Pharma, Inc. (TheraCour) that enabled creation of drugs engineered specifically to combat viral diseases in humans. This exclusive license from TheraCour serves as a foundation for our intellectual property. We have a worldwide exclusive license to this technology for several field of application verticals with specific targeting mechanisms for the treatment of a number of human viral diseases. TheraCour owns approximately 21% of our voting capital stock and, Anil Diwan, our Founder, President and Executive Chairman, owns approximately 90% of TheraCour’s capital stock.
Our drug candidates are licensed from TheraCour, and are developed by TheraCour for the Company on the basis of several patents, patent applications, provisional patent applications, and other proprietary intellectual property know-how held by TheraCour. Unlike usual pharma industry licenses that are specified for single chemical entities or for groups of similar chemical entities, our licenses are specified for the vertical application field of use, thereby providing us with a large universe of diverse development candidates under the same umbrella. Further, the licenses are held by NanoViricides for worldwide use and can be sub-licensed. The licenses can revert only in the case of a default by NanoViricides. The terms of default are such that, effectively, TheraCour would be able to take the licenses back only in the event that NanoViricides declares insolvency and inability to conduct its business.
We have exclusive licenses from TheraCour for drug candidates derived from and based on TheraCour’s technologies for several viruses. In 2005, we obtained a license from TheraCour for the treatment of the following human viral diseases: Human Immunodeficiency Virus (HIV/AIDS), Influenza including Asian Bird Flu Virus (INF), Herpes Simplex Virus (HSV-1 and HSV-2), Hepatitis C Virus (HCV), Hepatitis B Virus (HBV), and Rabies. Thereafter, on February 15, 2010, we entered into an TheraCour-Nanoviricides Additional License Agreement (“Additional License Agreement”) with TheraCour granting the Company the exclusive licenses for technologies developed by TheraCour for the additional virus types for Dengue viruses (DENV), Japanese Encephalitis (JEV), West Nile Virus (WNV), viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes Keratitis, and Ebola/Marburg viruses. While herpes simplex viruses were already specified as licensed previously, the term “ocular herpes keratitis” was added to this additional license agreement at the specific request of the Company for clarity only. In addition, we completed the process of licensing the VZV (shingles, chicken pox virus) field from TheraCour in November 2019. We further completed the process of licensing antivirals for the field of human coronavirus indications in September 2021 under the COVID agreement. As in the past, as and when advised by counsel, we will seek additional licenses to verticals of antiviral fields from TheraCour. To date, TheraCour has not withheld any licenses for antiviral nanomedicines that NanoViricides has requested.
We retain worldwide exclusive rights to commercially develop, commercialize, and market the licensed products. We pay TheraCour for the R&D work asked to be performed by the Company to develop these drugs, their chemistries, formulations, and manufacturing processes, substantially at cost, with a certain fee as specified in the license agreements. We may perform initial developmental testing by ourselves and through third parties, such as academic labs, government institutions, contract research organizations, for safety and effectiveness, among other tests. The Company may perform further IND-enabling advanced pre-clinical studies using third parties, such as contract research organizations, usually on clinical drug candidates. We expect to perform human clinical trials using contract research organizations with expertise in such clinical trials. We intend to sponsor the drugs for commercialization activities and obtain the rights of commerce under various regulatory authorities for its own use.
We focus our research and clinical programs on specific anti-viral therapeutics and are seeking to add to its existing portfolio of products through our internal discovery and clinical development programs and through an in-licensing strategy. To date, we have not commercialized any product.
For all the licensed fields, we control the research and work TheraCour performs on our behalf and no costs may be incurred without the prior authorization or approval by us.
The TheraCour technologies and patents required for execution of our work in the licensed fields and licensed products are automatically licensed to us even if such technologies and patents are developed after the license agreements themselves.
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Patents, Patent Applications, Proprietary Rights
Patents and other proprietary rights are essential for our operations. If our drugs are protected by a properly designed and enforceable patent, it can be more difficult for our competitors to use our technology to create competitive products and more difficult for our competitors to obtain a patent that prevents us from using technology we create. As part of our business strategy, in conjunction with TheraCour, we actively seek patent protection both in the United States and internationally and intend to file additional patent applications, when appropriate, to cover improvements in our compounds, products and technology. We also rely on trade secrets, internal know-how, technological innovations and agreements with third parties to develop, maintain and protect our competitive position. Our ability to be competitive will depend on the success of this strategy.
A new international PCT patent application regarding coronavirus drug candidates, PCT/US21/39050, entitled “Self-Assembling Amphiphilic Polymers As Anti-Covid-19 Agents,” was filed under the Patent Cooperation Treaty (PCT) on June 25, 2021. An additional international PCT patent application that builds on this application regarding coronavirus drug candidates, PCT/US22/35210, entitled “Self-Assembling Amphiphilic Polymers As Anti-Covid-19 Agents,” was filed on June, 28, 2022, with a requested priority date of the 2021 application. Our anti-COVID drugs are based on polymeric micelle nanomedicine technologies developed by TheraCour and its affiliate, AllExcel, Inc. (“AllExcel”). The inventors at AllExcel have filed these two broad PCT patent applications that form the basis of our two lead drug candidates, namely, NV-CoV-2 and NV-CoV-2-R. These new patent applications cover the new technologies, compositions, formulations, processes, manufactured products, and methods of use, among other specifics.
The nominal expiry date for patents resulting from these two PCT applications would be 20 years, after filing and if issued, i.e. June 24, 2041, and could be extended in certain countries under regulatory extensions to as late as into the year 2043, providing a significant commercial runway.
We believe that our drugs by themselves may be eligible for patent protection. We, in conjunction with TheraCour, plan on filing patent applications for protecting these drugs when we have definitive results that enable clinical drug development. We believe this strategy would maximize the available commercial patent life for many of our future drugs well beyond 2043. We intend to file the patent application for HerpeCide before entering human clinical trials, as we have done for our Coronavirus program. The estimated expiry date for the HerpeCide patents, if and when issued, would be no earlier than 2044-2049.
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The Company has licenses to key patents, patent applications and rights to proprietary and patent-pending technologies related to our compounds, products and technologies (see Table 1), but we cannot be certain that issued patents will be enforceable or provide adequate protection or that pending patent applications will result in issued patents.
Table 1: Intellectual Property, Patents, and Pending Patents Licensed by the Company | ||||
Patent or Application | Date of Issue/ | US Expiry Date | International | Owners |
PCT/US06/01820 SOLUBILIZATION AND TARGETED DELIVERY OF DRUGS WITH SELF-ASSEMBLING AMPHIPHILIC POLYMERS | Applied: Jan 19, 2006 PCT U.S. Issuance: May 8, 2012. | Oct. 2028 (estimated) | Applications are in various prosecution stages. Fifty-two of these have been issued or validated. | TheraCour Pharma, Inc. [Exclusive License]. |
PCT/US2007/001607 SELF-ASSEMBLING AMPHIPHILIC POLYMERS AS ANTIVIRAL AGENTS | Applied: Jan 22, 2007 | Ca. 2029 (estimated) | Applications are in various prosecution stages. Nine of these have been issued or validated. | TheraCour Pharma, Inc. [Exclusive License]. |
PCT/US21/39050 - SELF-ASSEMBLING AMPHIPHILIC POLYMERS AS ANTI-COVID-19 AGENTS | Applied: June 25, 2021 | Ca. 2043 (estimated) | PCT Application filed. | TheraCour Pharma, Inc. [Exclusive License]. |
PCT/US22/35210 – SELF-ASSEMBLING AMPHIPHILIC POLYMERS AS ANTI-COVID-19 AGENTS (**) | Applied: June 28, 2022 | Ca. 2043 (estimated) | PCT Application filed. | TheraCour Pharma, Inc. [Exclusive License]. |
**: The PCT application PCT/US22/35210 was filed with request for priority of PCT/US21/39050. | ||||
We have previously announced certain important issuances of patents on the TheraCour® technology underlying our Nanoviricides® drugs. A total of at least 61 patents have been issued globally, on the basis of the first two international PCT patent families that cover the fundamental aspects of the platform technology we license from TheraCour. Additional patent grants are expected to continue as the applications progress through prosecution processes. All of the resulting patents have substantially broad claims. These patents have nominal expiry dates in 2026 to 2029.
The patent expiry dates can be further extended in several countries and regions for the additional allowances due to the regulatory burden of drug development processes, or other local considerations, such as licensing to a local majority held company. Many countries allow up to five years extension for regulatory delays.
We believe that the novel compositions disclosed in these patent applications, and additional proprietary intellectual property provide the necessary features that enable the development of nanoviricides. We believe that no other published literature materials or existing patents are capable of providing all of the necessary features for this development, to the best of our knowledge. However, we have no knowledge of the extensive active internal developments at a number of companies in the targeted therapeutics area.
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TheraCour may obtain patents for the compounds many years before we obtain marketing approval for them. Because patents have a limited life, which may begin to run prior to the commercial sale of the related product, the commercial value of the patent may be limited. However, we may be able to apply for patent term extensions, based on delays experienced in marketing products due to regulatory requirements. There is no assurance we would be able to obtain such extensions. Patents relating to pharmaceutical, biopharmaceutical and biotechnology products, compounds and processes such as those that cover our existing compounds, products and processes and those that we will likely file in the future, do not always provide complete or adequate protection. Future litigation or reexamination proceedings regarding the enforcement or validity of our licensor, TheraCour’s existing patents or any future patents, could invalidate TheraCour’s patents or substantially reduce their protection. In addition, the pending patent applications and patent applications filed by TheraCour, may not result in the issuance of any patents or may result in patents that do not provide adequate protection. As a result, we may not be able to prevent third parties from developing the same compounds and products that we have developed or are developing. In addition, certain countries do not permit enforcement of these patents, and manufacturers are able to sell generic versions of our products in those countries. We also rely on unpatented trade secrets and improvements, unpatented internal know-how and technological innovation. In particular, a great deal of our material manufacturing expertise, which is a key component of our core material technology, is not covered by patents but is instead protected as a trade secret. We protect these rights mainly through confidentiality agreements with our corporate partners, employees, consultants and vendors. These agreements provide that all confidential information developed or made known to an individual during the course of their relationship with us will be kept confidential and will not be used or disclosed to third parties except in specified circumstances. In the case of employees, the agreements provide that all inventions made by the individual while employed by us will be our exclusive property. We cannot be certain that these parties will comply with these confidentiality agreements, that we have adequate remedies for any breach, or that our trade secrets will not otherwise become known or be independently discovered by our competitors.
Out-Licensing to Karveer Meditech Private Limited, India (KMPL)
On March 27, 2023 we entered into a license agreement with KMPL wherein we granted to KMPL a limited, non-transferable, exclusive license for the use, sale, or offer of sale in India of the two clinical test drug candidates titled as NV-CoV-2 and NV-CoV-2-R for the treatment of COVID in patients in India. KMPL has engaged in further drug development in India including sponsoring of drug candidates for human clinical trials in India and has acted as clinical trials manager for such clinical trials. KMPL shall provide NanoViricides with all reports of the clinical trials and the Company can use such reports for further advancement of the drug candidates with regulatory authorities outside India. In consideration, KMPL will be reimbursed by us for all direct and indirect costs incurred for the clinical trials and development activities with a customary clinical trials manager fee of thirty (30%) of such costs and applicable taxes. Upon commercial sales of any resulting approved drugs, KMPL will pay the Company a royalty of seventy (70%) percent of the final invoiced sales less costs to unaffiliated third parties. Dr. Anil Diwan, our Founder, President and Executive Chairman, is a passive investor in KMPL. His ownership interest does not provide him with control or significant influence over KMPL.
Trademarks
The Company currently has no registered trademarks.
Corporate Events - Financing
We had approximately $4.8 million cash in hand as of June 30, 2024, the end of the reporting period. In addition, in February 2024, we obtained a $2 million financing in the form of a line of credit from Dr. Anil Diwan, our founder, President and Executive Chairman. By signing on September 23, 2024 and being effective as of September 20, 2024, this credit line was increased to $3 million, and extended to cover the period ending March 31, 2026, with no other changes in the terms.
We spent approximately $6.3 million in cash on operating activities during the year ended June 30, 2024, a small increase over the $5.7 million in cash expenditures in the prior year ending June 30, 2023; the increase primarily due to clinical trial expenditures.
Additionally, we have long term assets of $7.5 million post-depreciation and amortization that represent our facilities that we plan on obtaining financing against in order to increase available cash for operations.
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We believe we have sufficient financing to close the Phase Ia/Ib clinical trial of NV-387 with completion of a final clinical study report, the healthy subjects treatment phase of which was recently completed and data analysis and reporting has been undertaken, and additionally to perform the necessary regulatory activities in preparation of initiating a Phase II clinical trial for the evaluation of efficacy of NV-387 for the treatment of RSV infection.
On May 5, 2023, we filed a registration statement on Form S-3 (File No. 333-271706) with the Securities and Exchange Commission (the “SEC”), as amended on May 8, 2023, which registration statement was declared effective by the SEC on May 22, 2023. Under this shelf registration process, we may, from time to time, sell up to $150 million in the aggregate of shares of common stock, shares of preferred stock, debt securities, warrants and units.
On or about August 1, 2023, our ATM Sales Agreement was amended to name EF Hutton, division of Benchmark Investments, LLC as the only sales agent (the “Agent”) and to remove B. Riley Securities, Inc. as a sales agent. On August 4, 2023, we filed a prospectus supplement relating to the issuance and sale of our common stock, par value $0.00001 per share, having an aggregate offering price of up to $5,713,022 from time to time through or to our Agent. These sales, if any, will be made pursuant to the terms of the amended ATM Sales Agreement between us and the Agent.
On April 5, 2024 we entered into a new sales agreement (“Sales Agreement”) with EF Hutton LLC, the Sales Agent, pursuant to which we may offer and sell, from time to time, through or to the Sales Agent, shares of common stock having an aggregate offering price of up to $50 million (the “ATM Offering”). As of June 30, 2024 we sold 1,308,651 shares of our $0.00001 par value common stock at an average price of $2.47 under the Sales Agreement. The net proceeds from the offering were approximately $3,120,000 after deducting underwriting discounts and other offering expenses.
We believe that we have several important milestones, including data from and final reports from the Phase Ia/Ib human clinical trial for our broad-spectrum drug NV-387 that is now in progress. Additional milestones include clinical trial applications for Phase II clinical trial of NV-387 for RSV indication, Pre-IND and IND filing to the US FDA, clinical trial applications to other regulatory agencies, etc. We plan on initiating the Phase II study as soon as feasible. To this end, we are also evaluating the possibility of a Phase II RSV Infection Challenge in Humans Clinical Trial. We are also looking at multiple worldwide jurisdictions for the Phase II clinical trial.
We believe that as we achieve these milestones, our ability to raise additional funds in the public markets would be enhanced. However, there is no guarantee that the Company will be able to raise funds on terms acceptable to it, or at all.
Our drug development strategies may be influenced by considerations regarding the ability to engage into licensing or co-development relationships with other pharmaceutical companies. Pharmaceutical drug development is an expensive and long duration proposition. Our current plan is focused on developing NV-387 for RSV indication to the necessary stage(s) for potential collaborations, followed by similarly developing NV-HHV-1 for shingles and the follow on systemic anti-herpesviruses drug candidate in the HerpeCide program to the necessary stage(s) for fruitful collaborations. Such licensing or co-development relationships may entail upfront payments, milestones payments, cost sharing, and eventual revenue sharing, including royalties on sales. There is no guarantee that we will be able to negotiate agreements that are financially beneficial to us. We intend to develop our drugs on our own if a suitable collaboration does not occur. As and when needed, management plans to continue to raise additional funds for our continuing drug development efforts from public markets. However, there can be no assurance that we will be successful in obtaining sufficient financing on terms acceptable to us.
Investor Outreach
We have retained Tradigital, Inc. as our investor relations firm. In addition, we have presented at various investor conferences.
On June 5, 2023, Dr. Anil Diwan, our President and Executive Chairman, presented our NV-387 COVID-related work and our Technology Assets at the BIO International Conference in Boston, MA.
On October 16, 2023, Dr. Anil Diwan presented the NanoViricides Platform for Targeted Drug Delivery at the PODD Conference in Boston, MA. The PODD Conference is focused on Partnership Opportunities in Drug Delivery.
On January 9, 2024, Dr. Anil Diwan presented the NanoViricides Platform, NV-387 and COVID drug development at the Biotech ShowCase Conference in San Francisco, CA.
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On May 15, 2024, Dr. Anil Diwan presented our work in one-one meetings with investors and investor groups at the EF Hutton Annual Global Conference, held at The Plaza Hotel in New York, NY.
Additionally, we routinely provide updates on our progress via press releases.
Business Development
As NV-387 matures past Phase I human clinical trials and towards Phase II efficacy evaluation “human proof-of-concept” stage, we believe that it should be of interest to potential collaborators for co-development and other opportunities. We have recently retained Aagami, Inc., for business development, specifically to seek licensing and partnering opportunities for our assets and platform technology. Aagami, Inc. is a life sciences consulting firm based in the suburbs of Chicago which offers strategic consulting services, business development support in regions where the client is unable to reach out due to bandwidth, technology licensing services, and business research & market intelligence services.
We plan on further enhancing our business development efforts in the coming year.
NanoViricides Drug Programs
We are currently focused on developing NV-387 for multiple antiviral indications that include RSV, Influenza, Smallpox for Biodefense and possibly COVID.
Expansion of Indications for NV-387 and NV-387-based Modality 3 Drug Candidates
As previously noted, NV-387 is based on the S-PG class of attachment receptor(s) to which over 90% of human pathogenic viruses are known to bind. We plan on continuing evaluation of activity of NV-387 against additional viruses of interest in order to better define and harness its broad-spectrum antiviral potential.
Our Drug Programs for RSV (Table 2.A):
We plan to pursue NV-387 as a treatment for RSV infection towards the goal of regulatory approval for the treatment of pediatric RSV infections.
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NV-387 may be eligible to advance directly into Phase II Human clinical trials for RSV treatment.
It is expected that NV-387 can be advanced into Phase II studies against RSV once the current Phase I studies of NV-CoV-2 drug products (which contain the same API, NV-387) are completed. This will significantly speed up the development of the RSV drug, save costs, and improve return on investments (ROI).
Table 2.A. Broad-Spectrum Antiviral NV-387 - Additional Indications : RSV (Modality 1) | ||||
No. | Drug | Indications | Development | Priority |
1 | Oral Gummies, | ● RSV Infection ● Non-hospitalized ● Patients of all ages, pediatric to over 65; with or without co-morbidities | Phase II ready | A |
2 | Oral Syrup, | ● RSV Infection ● Non-hospitalized ● Patients that require drug titration (i.e. specified mg/Kg dosing, as with younger pediatric populations); with or without co-morbidities | Phase II ready | A |
3 | Injectable Solution, Use for Injection or for Infusion | ● RSV Infection ● Hospitalized ● Patients of all ages, pediatric to over 65; with or without co-morbidities | IND-Preparation | B |
4 | Injectable Solution, Use for Inhalation and for Infusion | ● RSV Infection ● Hospitalized, Severe Disease ● Patients of all ages, pediatric to over 65; with or without co-morbidities | IND-Preparation | B |
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The FluCide™ Program
We are now advancing NV-387 for the treatment of Influenza virus infections. The drugs we plan to develop towards regulatory approvals and corresponding development priorities we have assigned are shown in Table 2.B.
Table 2.B. Broad-Spectrum Antiviral NV-387 - Additional Indications : Influenzas (Modality 1) | ||||
No. | Drug | Indications | Development | Priority |
1 | Oral Gummies, | ● Influenza virus Infection ● Non-hospitalized ● Patients of all ages, pediatric to over 65; with or without co-morbidities | Phase II ready | B |
2 | Oral Syrup, | ● Influenza virus Infection ● Non-hospitalized ● Patients that require drug titration (i.e. specified mg/Kg dosing, as with younger pediatric populations); with or without co-morbidities | Phase II ready | B |
3 | Injectable Solution, | ● Influenza virus Infection ● Hospitalized ● Patients of all ages, pediatric to over 65; with or without co-morbidities | IND-Preparation | C |
4 | Injectable Solution, | ● Influenza virus Infection ● Hospitalized, Severe Disease ● Patients of all ages, pediatric to over 65; with or without co-morbidities | IND-Preparation | C |
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The Smallpox/Mpox Biodefense Program
We are planning to advance NV-387 for the treatment of Smallpox virus infections by itself and possibly in combination with tecovirimat. We plan on developing NV-387 on our own to the extent that is necessary for engagement of non-dilutive governmental funding partners. We plan on performing the definitive regulatory trials under the US FDA Animal Rule if we can obtain non-dilutive financing support. The drugs we plan to develop towards regulatory approvals and corresponding development priorities we have assigned are shown in Table 2.C.
Table 2.C. Broad-Spectrum Antiviral NV-387 - Additional Indications : Smallpox (Modality 1) | ||||
No. | Drug | Indications | Development | Priority |
1 | Oral Gummies, | ● Smallpox virus Infection ● Non-hospitalized ● Patients of all ages, pediatric to over 65; with or without co-morbidities | Phase II ready | C |
2 | Oral Syrup, | ● Smallpox virus Infection ● Non-hospitalized ● Patients that require drug titration (i.e. specified mg/Kg dosing, as with younger pediatric populations); with or without co-morbidities | Phase II ready | C |
3 | Injectable Solution, | ● Smallpox virus Infection ● Hospitalized ● Patients of all ages, pediatric to over 65; with or without co-morbidities | IND-Preparation | D |
4 | Injectable Solution, | ● Smallpox virus Infection ● Hospitalized, Severe Disease ● Patients of all ages, pediatric to over 65; with or without co-morbidities | IND-Preparation | D |
Further Development of NV-387 As Treatment for Coronavirus Infections
Even though it has fallen off the public sight, SARS-CoV-2 infection and the COVID caused by it continues to cause significant hospitalizations and mortality year over year. Most recently, the annual fatalities ascribed to COVID alone were approximately twice those ascribed to Influenza infections. In addition, residual SARS-CoV-2 infection is linked to a large fraction of so called “Long COVID” cases.
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We plan on further developing NV-387 for treatment of COVID, Long COVID, and severe seasonal coronavirus infections, only in appropriate collaborations, including but not limited to governmental and non-governmental agencies or other pharma companies. The drugs we plan to develop towards regulatory approvals and corresponding development priorities we have assigned are shown in Table 2.D.
Table 2.D. Broad-Spectrum Antiviral NV-387 - Coronavirus Infections | ||||
No. | Drug | Indications | Development | Priority |
1 | NV-CoV-2 | ● Mild to Moderate COVID-19 ● Non-hospitalized ● Patients of all ages, pediatric to over 65; with or without co-morbidities ● Long COVID (patient positive for SARS-CoV-2 in ultra-sensitive test) ● Seasonal coronavirus afflictions ● MERS, SARS-CoV-1 | Phase II ready | C |
2 | NV-CoV-2 | ● Mild to Moderate COVID-19 ● Non-hospitalized ● Patients that require drug titration (i.e. specified mg/Kg dosing, as with younger pediatric populations); with or without co-morbidities ● Long COVID (patient positive for SARS-CoV-2 in ultra-sensitive test) ● Seasonal coronavirus afflictions ● MERS, SARS-CoV-1 | Phase II ready | C |
3 | NV-CoV-2 Injectable Solution for Injection, Infusion or Inhalation: | ● Moderate to Severe COVID-19 ● Hospitalized or with Urgent Risk of Hospitalization ● Patients of all ages, pediatric to over 65; with or without co-morbidities ● Long COVID (patient positive for SARS-CoV-2 in ultra-sensitive test) ● Seasonal coronavirus afflictions ● MERS, SARS-CoV-1 | IND-Preparation | D |
4 | NV-CoV-2 Injectable Solution for Injection, Infusion or Inhalation: | ● Moderate to Severe COVID-19, requiring Oxygen Support ● Hospitalized or with Urgent Risk of Hospitalization ● Patients of all ages, pediatric to over 65; with or without co-morbidities ● Long COVID (patient positive for SARS-CoV-2 in ultra-sensitive test) ● Seasonal coronavirus afflictions ● MERS, SARS-CoV-1 | IND-Preparation | D |
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Our Drug Programs for Varicella Zoster Virus (VZV), Cause of Shingles and Chickenpox (Table 2.E):
NV-HHV-1 skin cream for the treatment of shingles rash
NV-HHV-1 is our lead drug candidate in the HerpeCide™ program. It has advanced as a skin cream through pre-clinical development stages and at present it is at the IND application stage, with the design of clinical protocols, clinical site selection, and preparing for clinical trials, in process. Shingles is caused by reactivation of VZV (Varicella-Zoster Virus), which causes chickenpox in children.
Several additional indications in the HerpeCide™ program, including skin creams for the treatment of “genital ulcers” (HSV-2), and for the treatment of “cold sores” (HSV-1”) are expected to follow the shingles candidate into clinical development.
NV-HHV-1 is a Virus-Family-Specific drug candidate based on the Nanoviricides Platform Modality 2. The ligand used therein copies features of the HerpesVirus Entry Mediator (HVEM), which is the receptor used for cell entry by HSV-1 and HSV-2. It was not known whether VZV uses HVEM.
As part of the IND-enabling development of our topical skin cream for treatment of shingles rash, we have performed a substantial amount of safety and toxicology studies. We performed non-GLP safety toxicology studies in a rat model with two of the development stage candidates first. Both candidates were extremely well tolerated and no adverse events occurred. These safety/toxicology studies along with efficacy studies in the Human Skin Organ Culture model of Dr. Moffat, led us to identify a clinical candidate, namely, NV-HHV-1. We have performed IND-enabling non-GLP Safety Toxicology studies of this clinical candidate in multiple animal species. NV-HHV-1 was well tolerated at all dosages tested and none of the parameters tested were affected. A GLP Safety/Toxicology study of dermal treatment in mini-pigs also found that NV-HHV-1 was well-tolerated as a skin cream. These safety results are in agreement with histopathological observations in the human skin organ culture model studies.
We manufactured NV-HHV-1 in a cGMP-compliant manner at our own facility for its IND-enabling GLP Safety/Toxicology study. The drug substance, or active pharmaceutical ingredient (API) was produced at approximately 1Kg-scale. Drug products, i.e. different dose levels of the skin cream, were made at scales of 3-5kg batches.
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We have conducted a Pre-IND Meeting with the FDA regarding NV-HHV-1 as treatment for Shingles rash, and received a response from the FDA in May 2019. In particular, the FDA agreed that the Company’s strategy for drug substance and drug product acceptance criteria is adequate. The FDA further agreed that the IND-enabling non-clinical studies proposed by the Company are generally adequate. The FDA also stated that the proposed design of the IND-opening human clinical studies appears reasonable at this time. The FDA made valuable suggestions in the pre-IND response. The additional non-clinical studies recommended by the Agency were generally consistent with our then-planned IND-enabling non-clinical studies. These studies have been completed subsequent to the Pre-IND Meeting.
Table 2.E. VZV Program; NanoViricides Drug Products in Development (Modality 2) | |||||
No. | Virus | Drug | Indications | Development | Priority |
1 | Varicella-Zoster Virus (VZV) Causes Chickenpox in children and immuno-compromised persons. Causes Shingles in adults. Causes Post-herpetic Neuralgia (long lasting pain after obvious shingles ulcers have healed). | NV-HHV-1 Dermal Topical (“Skin Cream”) | ● Mild to Moderate Shingles with Limited Body Coverage ● Non-hospitalized | IND-Preparation (Phase I/II). Pre-IND Meeting with US FDA Conducted. | C |
2 | NV-HHV-1 Oral Gummies | ● Mild to Moderate Shingles with More Extensive Body Coverage ● Mild to Moderate Chickenpox ● Non-hospitalized | Pre-Clinical | C | |
3 | Oral Syrup (Systemic Drug In Development) | ● Mild to Moderate Shingles ● Mild to Moderate Chickenpox ● Non-hospitalized ● Patients that require drug titration (i.e. specified mg/Kg dosing, as with younger pediatric populations); with or without co-morbidities | Pre-Clinical | D | |
4 | Injectable Solution, for Injection or Infusion (Systemic Drug In Development) | ● Moderate to Severe Shingles ● Moderate to Severe Chickenpox ● Hospitalized or with Urgent Risk of Hospitalization | Pre-Clinical | D | |
5 | NV-HHV-1 Oral Gummies | ● Post-Herpetic Neuralgia (PHN) ● Non-hospitalized | Pre-Clinical | E | |
6 | Oral Syrup (Systemic Drug In Development) | ● Post-Herpetic Neuralgia (PHN) ● Non-hospitalized ● Patients that require drug titration | Pre-Clinical | E | |
7 | Injectable Solution, for Injection or Infusion (Systemic Drug In Development) | ● Post-Herpetic Neuralgia (PHN) ● Hospitalized or with Urgent Risk of Hospitalization | Pre-Clinical | E | |
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Shingles and associated pain, post-herpetic neuralgia (PHN)
Shingles is caused by re-activation of the chickenpox virus that most humans acquire in childhood. The chickenpox vaccine for children is a live, attenuated virus (LAV). The LAV is not as pathogenic as the wild-type virus. However, this means the virus is present in the vaccinated individual, but remains suppressed by the immune system. In both vaccinated and unvaccinated persons, re-activation occurs when the immune system is suppressed which may be simply because of stress, advanced age, or some other immune modifying circumstances including immune-compromise due to organ transplants or other diseases. Generally, humans in the age range of 50-60 are more prone to shingles, with next reactivation occurring about 10-15 years later. There is a shingles vaccine approved for adults aged 60 and above which is also available for adults younger than that.
Acyclovir-based oral drugs, such as valacyclovir (Valtrex®), are available as systemic therapy for shingles. Intravenous acyclovir is also employed for treatment of various VZV indications. However, VZV is substantially less sensitive to (val) acyclovir than is HSV-1. Thus, the oral drug generally does not result in optimal level of the active drug at the site of VZV viral production, and does not result in significant control of the pathology. The antiviral drugs may be given for a period of 14 days or longer, with as much as 5g of dose per day, due to poor efficacy. In some indications, the treatment has been continued for a year or so. Thus, there is an unmet need for developing anti-VZV antivirals with high efficacy and safety.
Most adults with shingles recover in about 15-30 days from the shingles rash. While the rash is unsightly, its stinging pain is often the debilitating pathology that leads to lost workdays and other effects. Further, 65-70% of patients develop Postherpetic neuralgia, or PHN, a stinging, debilitating pain that lasts more than 30 days, and, in some patients, may last for years.
It is generally believed that PHN results from damage to the local nerve endings and nerve cells caused by the uncontrolled production of the shingles virus. However, VZV has been found to be present in at least 75% of PHN cases in a study, indicating a role for antivirals in controlling PHN. We believe that an effective therapy, such as our nanoviricide against VZV, which blocks progression of the virus to infect new cells and thereby limits further production of virus, would minimize the damage to nerve endings and nerve cells caused by the virus. We believe that this would minimize the occurrence, severity, and time period of PHN, in addition to having significant effects on the severity of shingles rash, lesions, and healing time.
In light of this we have conducted an animal study regarding the effect of our nanoviricide drug candidates against shingles on neuropathic pain in a classical animal model of pain (without VZV infection). On August 7, 2018, we reported that our anti-Shingles drug candidates were effective in ameliorating pain sensations in an animal model of abnormal pain. In this animal study, topical treatment with the nanoviricides® anti-VZV compounds significantly reduced the measures of abnormal pain sensations in a rat model of neuropathic pain. The study was conducted at AR BioSystems in Tampa, FL. A characteristic excruciating pain is a debilitating pathology of shingles presentation. Thus a direct pain-reducing effect of the Company’s anti-shingles drug candidates would be very important in ameliorating the pathology of shingles, in addition to the already demonstrated significant antiviral effect.
We believe that a skin cream would be the best form of treatment to provide rapid control of the virus and shingles lesions patch expansion, since the shingles outbreak remains highly localized. A skin cream would afford much greater local exposure of drug to virus compared to a systemic oral or injectable treatment.
An effective therapy for patients with severe shingles continues to be an unmet need.
NV-HHV-1 Skin Cream is intended for topical (dermal) application directly onto the shingles rash. It is expected to be useful in mild to moderate cases with limited body coverage of the rash in non-hospitalized patients.
Importantly, NV-HHV-1 has shown broad-spectrum activity against HSV-1 (cause of “cold sores”), HSV-2 (cause of “genital ulcers”), and VZV (the varicella-zoster virus, that causes chickenpox in children and immune-compromised humans, and shingles in adults). We therefore believe that NV-HHV-1 Skin Cream may be useful as a topical treatment of HSV-1 “cold sores” and HSV-2 “genital ulcers” in addition to treatment of Shingles skin rash.
Our other HerpeCide program candidates in progress at present are mostly based on NV-HHV-1, thereby maximizing return on investments and shareholder value.
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HerpeCide™ Drug Candidates Based on HVEM, the Potential Common Cognate Entry Receptor for the Nine Human Viruses in the Orthoherpesviridae Family Enable Additional Indications (Table 2.F – HSV-1 Programs, Table 2.G HSV-2 Programs, Drugs with Modality 2, Modality 3):
As previously noted, NV-HHV-1 is based on copying the herpesvirus binding site on the human cellular receptor HVEM. Therefore, NV-HHV-1 is likely to be a potential pan-herpesviridae nature of our anti-HSV drug candidates is expected to enable several anti-herpes viral indications. HSV-1 primarily affects skin and mucous membranes causing “cold sores.” HSV-2 primarily affects skin and mucous membranes leading to genital herpes. HSV-1 infection of the eye causes herpes keratitis that can lead to blindness in some cases. In addition, human herpesvirus-3 (HHV-3), aka varicella-zoster virus (VZV) causes chickenpox in children and, when reactivated in adults, causes shingles. Shingles breakouts are amenable to topical treatment, as are the HSV cold sores, genital lesions, and herpes keratitis of the eye.
Topical treatment is expected to result in extremely high antiviral efficacy. This is because such treatment would provide higher concentrations of the antiviral at the site where the virus is manifesting at its highest levels. Highly effective topical treatments in most of these scenarios remain unmet medical needs. Most of these indications do not have satisfactory treatments at present, if any.
Many of the herpesvirus family infections may also warrant systemic therapeutics (oral or injectable) in addition to topical therapeutics, for greater effectiveness. As demonstrated with NV-387 oral bioavailability, we believe we have potentially orally available drug candidates in the herpesvirus drugs pipeline.
We are also developing possibly even more effective pan-herpes drugs compared to NV-HHV-1 based on Modality 3, i.e. by encapsulating replication inhibitors inside the polymeric micelle “belly” of NV-HHV-1. We have developed derivatives of the well-known anti-herpes drug acyclovir for efficient encapsulation within NV-387 for this purpose. Further, the treatment of herpes virus infections caused by acyclovir- and famciclovir- resistant mutants is currently an unmet medical need. We are developing replication-inhibitors addressing this resistance issue as well, that we plan on encapsulating within NV-HHV-1.
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It is known that many of the human herpesvirus infections produce lifelong latent infections. The Modality 3 drugs we are making are expected to reduce the breakout frequency of such latent infections and may eventually cure the infection completely after repeated treatment. This is likely because it is well known that even repeated application of acyclovir-class of drugs in some patients leads to reduction in the breakout frequency or recurrence of herpes labilis (“cold sores”) caused by HSV-1. We do not expect that HHV-6A or HHV-6B infection could be cured by the Modality 3 approach because these two viruses are known to integrate their genome into human cells.
Table 2.F. HSV-1 Programs; NanoViricides Drug Products in Development (Modality 2, Modality 3) | |||||
No. | Virus | Drug | Indications | Development | Priority |
1 | Herpes Simplex Virus -1 (HSV-1) Causes Orolabial ulcers (“Cold Sores”); Recurrent Herpes Labialis (RHL) Causes Ocular Herpes Keratitis (HK) Causes viral Acute Retinal Necrosis (vARN) Also Linked to Alzheimer’s Disease (ALZD) | Dermal Topical (“Skin Cream”) | ● Mild to Moderate “Cold Sores” with Limited Body Coverage ● Non-hospitalized | Pre-Clinical | D |
2 | Oral Gummies | ● Mild to Moderate “Cold Sores” with More Extensive Body Coverage ● Non-hospitalized ● Recurrent Herpes Labialis | Pre-Clinical | D | |
3 | Oral Syrup | ● Mild to Moderate “Cold Sores” with More Extensive Body Coverage ● Non-hospitalized ● Recurrent Herpes Labialis ● Patients that require drug titration (i.e. specified mg/Kg dosing, as with younger pediatric populations); with or without co-morbidities | Pre-Clinical | E | |
4 | Injectable Solution, for Injection or Infusion | ● Moderate to Severe HSV-1 Lesions ● Hospitalized or with Urgent Risk of Hospitalization | Pre-Clinical | E | |
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With additional indications in the diseases caused by viruses in the herpes virus family, it is likely that our HerpeCide program could expand into a much broader product pipeline than previously anticipated. We anticipate that many of these new drugs would be variations on our current drug candidate for VZV, namely, NV-HHV-1. This should simplify drug development pathway and also maximize the Return on Investments (ROI).
Table 2.G. HSV-2 Programs; NanoViricides Drug Products in Development (Modality 2, Modality 3) | |||||
No. | Virus | Drug | Indications | Development | Priority |
1 | Herpes Simplex Virus -2 (HSV-2) Causes genital ulcers; Recurrent Herpes Genitalis (RHG) Causes Ocular Herpes Keratitis (HK) Causes viral Acute Retinal Necrosis (vARN) | Dermal Topical (“Skin Cream”) | ● Mild to Moderate Genital Ulcers with Limited Body Coverage ● Non-hospitalized | Pre-Clinical | D |
2 | Oral Gummies | ● Mild to Moderate Genital Ulcers with More Extensive Body Coverage ● Non-hospitalized ● Recurrent Herpes Genitalis | Pre-Clinical | D | |
3 | Oral Syrup | ● Mild to Moderate Genital Ulcers with More Extensive Body Coverage ● Non-hospitalized ● Recurrent Herpes Genitalis ● Patients that require drug titration (i.e. specified mg/Kg dosing, as with younger pediatric populations); with or without co-morbidities | Pre-Clinical | E | |
4 | Injectable Solution, for Injection or Infusion | ● Moderate to Severe HSV-2 Lesions ● Hospitalized or with Urgent Risk of Hospitalization | Pre-Clinical | E | |
We are developing drugs against three indications in the HerpeCide program in parallel at present, namely, HSV-1 “cold sores” (orolabial herpes and recurrent herpes labialis or RHL), HSV-2 “genital ulcers,” and VZV shingles. We are developing topical treatments (skin creams or lotions) for these three indications. All of the drug candidates in these three leading indications comprise common chemistry features and are based on the same family of ligands and polymers, enabling efficient parallel development.
We believe that our parallel development of these indications maximizes return on investment and shareholder value.
Of these, the shingles indication program has resulted in the clinical drug candidate NV-HHV-1, for which we are in the process of clinical trial design and clinical site selection, which will be a part of the IND application.
Our HerpeCide™ program has matured towards multiple drug indications. Besides the three indications listed above, modifications of the same drug candidates are anticipated to be developed into (iv) Eye Drops to treat ocular (i.e. external eye) Herpes Keratitis (HK) caused by HSV-1 or HSV-2, and possibly (v) Intra-Ocular injections to treat viral Acute Retinal Necrosis (vARN) caused by herpes viruses, primarily VZV, shingles (varicella zoster virus) and HSV-2, a cause of blindness.
In addition, we believe that the shingles drug candidate may be eligible for the PHN indication as well. PHN clinical studies are long and expensive, and we plan to advance the candidate for this indication only after its shingles indication clinical trials are completed. Further, the same drug candidate is expected to work against chickenpox in children. Chickenpox remains a sporadic epidemic disease despite vaccines.
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Expansion to additional indications is likely, as we perform further studies. It is likely that some of these drug candidates with variations may be able to address diseases caused by the remaining human herpes viruses, namely EBV, HCMV, HHV-6A, HHV-6B, and HHV-7. We believe that such expansions would enable maximization of return on investment (ROI) and maximization of shareholder value.
Including the HerpeCide program explained above, we currently have about 11 different drug development programs, attesting to the strength of our platform technology.
We have chosen to focus strategically on the applications of NV-387 which was developed as a pan-coronavirus drug initially, and which appears to have a much broader spectrum of activity.
We believe that a skin cream for the control of HSV-1 “cold sores” (herpes labialis, and recurrent herpes labialis or RHL) is another drug candidate that may be close to entering human clinical trials. We have already achieved strong success in animal studies against HSV-1, as discussed above.
Eye Diseases Caused by Herpesviruses (HSV-1, HSV-2, VZV), Ocular Herpes Keratitis, viral Acute Retinal Necrosis (Table 2.H, Drug Modality 2, Modality 3)
We believe that we will be able to successfully develop a drug candidate for Ocular Herpes Keratitis (HK) as well. HK is caused by HSV-1 or HSV-2 infection of the external eye. We are developing this drug as topical eye drops or eye lotion, in order to achieve maximum local drug effect while minimizing systemic exposure. We plan on testing these drug candidates against adenoviruses as well, to determine if the same drug would also be effective against epidemic keratoconjunctivitis (EKC, the severe “pink eye” disease). If the same drug works against herpes virus and adenovirus infections of the eye, we expect this drug may cover almost 99% of all external eye viral pathologies.
We also believe that we will be able to develop a drug against HSV-2 genital herpes. We plan on developing a skin cream for this indication, to maximize local effectiveness.
Viral Acute Retinal Necrosis (v-ARN)
We are also exploring additional indications of its anti-herpes drug candidates that are expected to broaden the pipeline and require limited development work. In particular, certain eye diseases of the retina have been causatively linked to herpes viruses. For example, most cases of viral Acute Retinal Necrosis (ARN), a disease that leads to severe loss of vision and can lead to blindness, have been linked to VZV and HSV-2, with some also associated with HSV-1 or CMV infection of the eye. It is believed that, HSV-2 ARN in children and adolescents may result from undiagnosed and asymptomatic neonatal HSV-2 infection, which has reactivated several years later from latency in a cranial nerve and entered the retina. Currently, intravenous treatment followed with oral acyclovir derivatives daily for several months to years and sometimes intravitreal (into the eye) foscarnet injections are therapeutically employed with limited effectiveness, establishing the potential of effective antiviral therapy to avoid blindness as well as multiple surgeries related to retinal detachment. A highly effective antiviral that can be injected into the eye infrequently and provides sustained antiviral therapeutic effect over a long period of time for ARN is an unmet medical need.
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Neonatally acquired herpes virus infections, even when asymptomatic, are thought to have led to ARN as late as age 22. There are approximately 2,500 cases per year of diagnosed neonatal herpes virus infections in the USA.
Table 2.H. Eye Diseases Caused by Herpesviruses (HSV-1, HSV-2, VZV); NanoViricides Drug Products in Development (Modality 2, Modality 3) | |||||
No. | Disease | Drug | Indications | Development | Priority |
1 | Herpes Keratitis (HK) Generally Caused by | Ocular Solution | ● Mild to Moderate Herpes Keratitis ● Non-hospitalized | Pre-Clinical | F |
2 | Oral Gummies | ● Mild to Moderate Herpes Keratitis ● Non-hospitalized | Pre-Clinical | F | |
3 | Oral Syrup | ● Mild to Moderate Herpes Keratitis ● Non-hospitalized ● Patients that require drug titration (i.e. specified mg/Kg dosing, as with younger pediatric populations); with or without co-morbidities | Pre-Clinical | F | |
4 | Injectable | ● Moderate to Severe Herpes Keratitis | Pre-Clinical | F | |
5 | viral Acute Retinal Necrosis Generally Caused by HSV-1, HSV-2, or VZV. | Injectable Solution | ● Moderate to Severe viral Acute Retinal Necrosis (v-ARN) | Pre-Clinical | F |
Our DengueCide™ Program
We intend to reengage the DengueCide program if and when non-dilutive funding such as research grants become available to us. At present we have not applied for any grants for this program.
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Our HIVCide™ Program
We intend to re-engage the HIVCide program once the HerpeCide drug candidates enter human clinical trials, resource permitting. Previously, the drug candidates in the HIVCide™ program were found to have effectiveness equal to that of a triple drug HAART cocktail therapy in the standard humanized SCID-hu Thy/Liv mouse model. Moreover, the nanoviricides were long acting. Viral load suppression continued to hold for more than four weeks after stopping HIVCide treatment. We believe that this strong effect and sustained effect together indicate that HIVCide can be developed as a single agent that would provide “Functional Cure” from HIV/AIDS. We believe that substantially all HIV viruses can be cleared upon HIVCide treatment, except the integrated viral genome in latent cells. This would enable discontinuation of treatment until HIV reemerges from the latent reservoir, which may be several months without any drugs. Moreover, we believe that this therapy would also minimize the chances of HIV transmission. These drug candidates are effective against both the R5 and X4 subtypes of HIV-1 in cell cultures. We believe that these drug candidates are “broad-spectrum”, i.e. they are expected to be effective against most strains and mutants of HIV, and therefore escape of mutants from our drugs is expected to be minimal. Certain anti-HIV nanoviricides have already been demonstrated that appear to provide extended viral load suppression for as long as 30 days or more even after stopping the drug, in animal studies. Given the chronic nature of HIV/AIDS, such a drug that has long sustained effect is expected to provide significant benefits to the patient. We believe once a week dosing is possible for our anti-HIV drugs. Anti-HIV drug development is both expensive and slow because of the nature of the animal studies that require SCID mice whose immune system is destroyed and then replaced by surgically implanting and growing human immune system tissues in the mouse body. Due to our limited resources, HIVCide development is further hampered.
Adenoviral EKC
The Company is developing broad-spectrum eye drops that are expected to be effective against a majority of the viral infections of the external eye. Most of these viral infections are from adenoviruses or from herpes viruses. The Company has shown excellent efficacy of its drug candidates against EKC (adenoviral epidemic keratoconjunctivitis) in an animal model. If feasible, we are planning to merge the anti-EKC drug development program and the ocular Herpes Keratitis drug development program, to develop a single drug that is effective against both diseases, i.e. effective against both adenoviruses and herpes viruses. This work is in research stage.
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Other Drug Programs: “Disease X”, MPox, Smallpox, Acute Flaccid Myelitis (AFM, EV68), Polio, Pediatric Acute Adenoviral Hepatitis, Ebola/Marburg, Rabies and Others (Table 2.I)
In addition, the Company also has research programs against Rabies virus, Ebola and Marburg viruses, and others. We will not be undertaking socially important programs such as the development of an anti-Zika virus drug candidate, or continuation of our efforts in developing anti-Ebola drug candidate, unless non-dilutive funding for such efforts becomes available. At present we have not applied for any grants for these programs.
Table 2.I. All Other Programs; NanoViricides Drug Products in Development | |||||
|---|---|---|---|---|---|
Program | Virus | Indications | Drug Candidate & | Priority | |
1 | “Disease X”, | Unknown or Novel Virus | Treatment | NV-387-Rp, | TBD |
2 | Mpox Treatment | Mpox Virus, Smallpox, Poxviruses | Poxvirus family viral infection | NV-387, Ready for Development Under US FDA Animal Rule | TBD |
3 | Enterovirus 68 Treatment | Enterovirus 68 or Related Viruses | Acute Flaccid Myelitis (AFM) | Screening Existing Drugs in Our Pipeline (Modality 1, 2, 3)) | TBD |
4 | Adenovirus 71 Treatment | Adenovirus 71 or Related Viruses | Severe Pediatric Hepatitis Caused by Adenovirus 71 | Screening Existing Drugs in Our Pipeline (Modality 1, 2, 3)) | TBD |
5 | HerpeCide™ Program Expansion Drug Projects | EBV, HCMV, HHV- 6A, HHV-6B, HHV7, KSHV | Broad-Spectrum nanoviricides against different herpes viruses for different indications | Screening Existing Drugs in Our Pipeline (Modality 1, 2, 3)) | E |
6 | HIVCide ™ | HIV/AIDS | Escape-resistant | NV-HIV-2, | E |
7 | HIVCide ™ | HIV/AIDS | Escape-resistant | R&D | E |
8 | FluCide™ Broad-Spectrum | All Influenza A | Injectable FluCide™ for hospitalized patients | Preclinical | F |
All Influenza A | Oral Flucide™ for outpatients | NV-387, Phase II ready | F | ||
9 | Nanoviricide Eye Drops | Adenoviruses, HSV-1 | Viral Diseases of the External Eye | Preclinical | F |
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Table 2.I. All Other Programs; NanoViricides Drug Products in Development | |||||
|---|---|---|---|---|---|
Program | Virus | Indications | Drug Candidate & | Priority | |
10 | DengueCide™ | Dengue viruses, all types | Broad-Spectrum nanoviricide | Preclinical (Modality 1, Modality 3) | F |
11 | Other Nanoviricides | Ebola/Marburg, Rabies, Others | Broad-Spectrum nanoviricide | R&D | G |
12 | Long Term Projects | Various Persistent Viruses | Technologies for Cures for | R&D | G |
Large Market Sizes –Targeting an Overall Anti-Viral Drug Market Size that Exceeds $40 Billion
The current market size for RSV drugs is estimated to be about $2 billion, and expected to grow to about $8 billion by 2030.
The current market size for drugs for the treatment of different herpes simplex infections is estimated to be approximately $2-4 billion. We believe that when an effective topical treatment is introduced, the market size is likely to expand substantially, as it has for several drugs in the antivirals, oncology, and other areas.
If a highly effective drug against HSV-1 and HSV-2 recurrences is developed, we believe the Herpesvirus Drugs market size would explode, as was seen with Hepatitis C virus.
Severe cases of shingles may lead to hospitalization in several thousand cases in the U.S. every year. In addition, shingles appearing on the face may reach the eye and may cause significant vision issues. In addition to the older inactivated chickenpox virus vaccine, Shingrix®, a two-dose vaccine has recently been introduced. However, due to the severe side effects in a significant percentage of persons taking this vaccine at its first dose, compliance as well as market penetration may be limited.
The outpatient treatment market size for shingles at present is limited, because of the limited effectiveness of existing drugs. An effective drug could expand this market into billions of dollars globally.
The market size for severe cases of shingles may be approximately one billion dollars. These estimates take into account the Shingrix® vaccine as well as existing vaccines. About 500,000 to 1 million cases of shingles occur every year in the U.S. alone.
In addition, the estimated market size for an effective anti-Influenza drug is expected to be in tens of billions of dollars. The current estimate of anti-influenza drug market size is approximately $4 billion. The current market size for anti-HIV treatments is in excess of $20 billion. Other drugs in our pipeline, taken together, are estimated to be several billion dollars in market sizes.
Presently, our focus is on developing NV-387 for treatment of RSV infections and other viral infections. Our next priority is the topical treatments for different herpes virus infections in the HerpeCide program, as listed elsewhere in this report. We plan on re-engaging our HIV programs when sufficient resources become available.
About the Priority Levels for Our Drug Development Programs:
The priority levels for our drug development programs are set forth in the tables below. The priority levels of A and B are our current focus, with priority level C to be taken up next for advanced preclinical and clinical development. Priority levels D, E, F, and G are longer term than priority levels A, B, C, and we work on those projects as we have resources available.
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Broad and Expanding Drug Pipeline Enabled by the NanoViricides Platform Technology
As can be seen from these extensive lists of drug development programs and targets, we have been making tremendous progress year-over-year in bringing successful anti-viral drugs based on our novel technology platform into human clinical studies.
We believe that with the human clinical trials of NV-387, we will be able to accumulate the evidence of human safety and effectiveness that would help us achieve meaningful partnerships with Big Pharma. We are also working on obtaining non-dilutive funding for various programs and projects in our pipeline. At present, we have sufficient funding to take us through the ongoing Phase Ia/Ib clinical trials for the NV-387 drug candidate. We believe that as we achieve proof of principle in human studies, we will be able to attract substantially greater market valuation and investor funding for further progress of these drugs towards approval and commercialization. We believe that once we have revenues from commercialization of our first drug or from partnership, we will be able to engage in further speeding up the development of programs in Tables 2.D through 2.I.
Our beliefs are based on results of pre-clinical cell culture studies, ex vivo tissue-based studies (e.g. human skin patch or a culture model), in vivo animal studies using small animals, and Phase I human clinical trials.
Drug Development Plan
We intend to perform the regulatory filings and own all the regulatory licenses for the drugs we are currently developing. We will develop these drugs in part via subcontracts to TheraCour, the exclusive source for these nanomaterials. With sourcing of materials from TheraCour, we prefer to manufacture these drugs in our own facility. However, we may manufacture these drugs under subcontract arrangements with external manufacturers that carry the appropriate regulatory licenses and have appropriate capabilities. We intend to distribute these drugs via subcontracts with distributor companies or in partnership arrangements. We plan to market these drugs either on our own or in conjunction with marketing partners. We also plan to actively pursue co-development, as well as other licensing agreements with other pharmaceutical companies, both in the US and internationally. Such agreements may entail up-front payments, milestone payments, royalties, and/or cost sharing, profit sharing and many other instruments that may bring early revenues to us. Such licensing and/or co-development agreements may shape the manufacturing and development options that we may pursue.
Competition
Our products in development target a number of diseases and conditions that include several different kinds of viral infections. There are many commercially available products for some of these diseases and a large number of companies and institutions are spending considerable amounts of money and other resources to develop additional products to treat some of these diseases. Most of these companies have substantially greater financial and other resources, larger research and development staffs, and extensive marketing and manufacturing organizations. When and if we are able to successfully develop products, they would compete with existing products based primarily on:
| ● | efficacy; |
| ● | safety; |
| ● | tolerability; |
| ● | acceptance by doctors; |
| ● | patient compliance; |
| ● | patent protection; |
| ● | ease of use; |
| ● | price; |
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| ● | insurance and other reimbursement coverage; |
| ● | distribution; |
| ● | marketing; and |
| ● | adaptability to various modes of dosing. |
Several companies have advanced drug candidates for the management of COVID-19. Remdesivir, an antiviral drug, has received full approval, but requires repeated infusions and has limited clinical effectiveness. Oral Molnupiravir (Merck and Ridgeback) has received EUA, but it has very poor effectiveness and has well-known risks of mutagenicity, and is not widely used. Oral Paxlovid (a combination of nirmatrelvir and ritonavir tablets taken together, Pfizer) has received full approval but was only effective in the population at high-risk of hospitalizations such as persons with co-morbidities and over age 65. Its use in persons not listed is considered off-label, and a recent clinical report has shown that it has no benefits relative to placebo treatment in these groups. Also in a certain percentage of cases Paxlovid has been shown to cause viral resurgence after achieving COVID-negative status upon treatment. Several antibodies had received EUAs, but all of these have been revoked due to loss of efficacy as new variants emerged. None of the available drugs attack the external circulating virus particles or block the re-infection cycle as NV-CoV-2 is designed to do. Thus, their mode is complementary to NV-CoV-2 and combination therapy with one of these drugs and NV-CoV-2 may yield substantial benefits. We also note that none of these drugs in development attack the complete lifecycle of the virus as NV-387-Rp is designed to do, to the best of our knowledge.
There are several drugs in the market that effectively control HSV cold sores and genital herpes lesions in most patients. These include the nucleoside analogues idoxuridine, vidarabine, acyclovir, famciclovir, ganciclovir, and derivatives. However, their efficacy is limited or toxicities are high. Brincidofovir, based on the toxic drug cidofovir, is in development by Chimerix, but certain clinical trials involving brincidofovir have failed to meet the desired end points and have actually shown a greater fatality rate in brincidofovir treated subjects compared to placebo. Foscarnet is also used for VZV and ARN, but its toxicity is high. FV-100 was in clinical development against VZV, but these clinical developments appear to have been abandoned. In addition, pritelivir, antibodies, and some other drugs are in advanced stages of development against HSV-1 or HSV-2. A gamma globulin was recently approved.
The prevalence of herpes simplex virus type 1 (HSV-1) and HSV-2 is 47.8% and 11.9%, respectively, for individuals aged 14 to 49 years, and increases with age, in the USA, according to CDC. HSV-2 causes a more severe disease that also has significant social costs to the patient. In spite of the existing drugs, both HSV-1 and HSV-2 cause lifelong infection that continues to reactivate at different rates in different patients. Thus, in spite of several existing drugs that are already generic, the market size for a highly effective drug is estimated to be in tens of billions of dollars for each of HSV-1 and HSV-2 treatments.
There are currently no approved drugs for the treatment of diseases caused by VZV, namely, Shingles, PHN, and Chickenpox. Valcyclovir or other acyclovir-class drugs are often prescribed orally but have little effect on shingles because VZV has an ineffective vTK enzyme, as opposed to HSV-1 and HSV-2, that is required for activating these drugs. Cidofovir is used in extreme cases of Shingles, but it is highly toxic, limiting benefit of the drug, limiting drug dosage and causing significant side effects. Several pain relievers are being developed to treat shingles pain and also the PHN pain.
Thus, a safe and effective treatment against VZV is an unmet medical need.
We are currently not aware of any approved drugs for the treatment of viral diseases of the external eye.
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The current approved drugs for influenza include the neuraminidase inhibitors Tamiflu, Relenza, and Peramivir, anti-influenza drugs that are sold by Roche, Glaxo SmithKline (GSK), and BioCryst partners, respectively. In addition, M2 channel inhibitors, generic drugs include amantadine and rimantadine, both oral tablets that only inhibit the replication of the influenza a virus have generally become ineffective because of significant viral resistance to the approved M2 channel inhibitors especially in the US. A viral endonuclease inhibitor, baloxavir (Xofluza, Shionogi/Roche) has recently been introduced as a single dose treatment. In its Phase III clinical trial, as many as 10% of patients were found to have drug-resistant virus mutants. Several companies are developing anti-influenza drugs at present. Small chemical classes include neuraminidase inhibitors, M2-channel inhibitors, and RDRP inhibitors, among others. There are also monoclonal, polyclonal, and mixed antibodies, as well as enzymes as drugs in development. Importantly, the resistance barrier for all of these drugs is rather low, and resistant mutants have arisen in the field. Thus, we believe that there is an unmet medical need for an effective and safe pan-Influenza drug that the virus is unlikely to escape.
There are a growing number of anti-HIV drugs being sold or in advanced stages of clinical development. Companies with HCV and HIV products include Gilead, Bristol-Myers Squibb Company (BMS), Roche, Boehringer Ingelheim, Merck & Co., Inc. (Merck), in addition to several other pharmaceutical and biotechnology firms.
Some antibody drugs have become available for Ebola/Marburg viruses, but are generally expensive, require infusion, and have poor acceptance. There are no drugs available for the treatment of Dengue viruses, Hendra/Nipah Viruses, and many others that are considered potential pandemic threats.
Currently there are two accepted methods of rabies prophylaxis: rabies vaccines and rabies immune globulin, manufactured by many foreign and multinational manufacturers including Aventis Pasteur and Chiron (acquired by Novartis). These accepted methods would be the standard against which our new anti-rabies drug in development will be judged.
Vaccines are in development for many of these viral diseases. Many vaccines have significant side effects. According to the Western Australian Vaccine Safety Surveillance – Annual Report 2021, the rates of serious adverse events with COVID-19 vaccines were at 260-300 per 100,000 whereas the rates for all other vaccines were about 11 per 100,000. The rate of myocarditis/myopericarditis was 0.4 per 100,000 doses of Vaxzevria (Astra-Zenecka), 4.5 per 100,000 doses of Comirnaty (Pfizer), and 7.3 per 100,000 doses of Spikevax (Moderna). The mRNA vaccines appear to have greater numbers of serious adverse events while overall COVID vaccines had thirty-times more events than the other vaccines in general use. (https://www.health.wa.gov.au).
In order to compete successfully, we must develop proprietary positions in patented drugs for therapeutic markets. Our products, even if successfully tested and developed, may not be adopted by physicians over other products and may not offer economically feasible alternatives to other therapies.
Government Regulation
Our operations and activities are subject to extensive regulation by numerous government authorities in the United States and other countries. In the United States, drugs are subject to rigorous regulation by the FDA. The Federal Food, Drug and Cosmetic Act and other federal and state statutes and regulations govern the testing, manufacture, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion of our products. As a result of these regulations, product development and the product approval process is very expensive and time consuming.
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Regulation by governmental authorities in the United States and other countries is a significant factor in our research and development and will be a significant factor in the manufacture and marketing of our proposed products. The nature and extent to which such regulation applies to us will vary depending on the nature of any products we may develop. Governmental authorities, including the FDA and comparable regulatory authorities in other countries, regulate the design, development, testing, manufacturing, safety, efficacy, labeling, storage, record-keeping, advertising, promotion and marketing of pharmaceutical products, including drugs and biologics, under the Federal Food, Drug, and Cosmetic Act, or FFDCA, and its implementing regulations, and, for biologics, under the Public Health Service Act, or PHSA, and its implementing regulations. Non-compliance with applicable requirements can result in fines and other judicially imposed sanctions, including product seizures, import restrictions, injunctive actions and criminal prosecutions of both companies and individuals. In addition, administrative remedies can involve requests to recall violative products; the refusal of the government to enter into supply contracts; or the refusal to approve pending product approval applications until manufacturing or other alleged deficiencies are brought into compliance. The FDA also has the authority to cause the withdrawal of approval of a marketed product or to impose labeling restrictions. The process of obtaining approvals and the subsequent compliance with appropriate statutes and regulations require the expenditure of substantial time and money, and there can be no guarantee that approvals will be granted.
FDA Approval Process
The FDA must “license” a drug before it can be sold in the United States. Other countries have similar regulatory processes, and most are being harmonized under the ICH guidelines (ICH stands for The International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use). As of the date of this filing, the FDA has approved other nano-particulate drugs including Emend® by Merck and Rapamune® by Wyeth, as well as others.
The general process for FDA approval is as follows:
Preclinical Testing
The process required by the FDA before a drug or biological product may be marketed in the United States generally involves the following:
| ● | Completion of preclinical testing of new pharmaceutical or biological products, generally conducted in the laboratory and in animal studies in accordance with GLP standard, and applicable requirements for the humane use of laboratory animals or other applicable regulations to evaluate the potential efficacy and safety of the product candidate; |
| ● | Submission of the results of these studies to the FDA as part of an Investigational New Drug application, which must become effective before clinical testing in humans can begin; |
| ● | Manufacturing of investigational medicine under cGMP standard; |
| ● | Performance of adequate and well-controlled human clinical trials according to GCPs and any additional requirements for the protection of human research patients and their health information, to establish the safety and efficacy of the product candidate for its intended use; |
| ● | Submission to the FDA of a new drug application, or NDA, for any new chemical entity drug we seek to market that includes substantive evidence of safety, purity, and potency, or safety and effectiveness from results of nonclinical testing and clinical trials; |
| ● | Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the product is produced, packaged and distributed, to assess compliance with cGMPs, to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; |
| ● | Potential FDA audit of the nonclinical study and clinical trial sites that generated the data in support of the NDA; and |
| ● | FDA review and approval of the NDA. |
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Clinical Trials
If the FDA accepts the investigational new drug application, we study the drug in human clinical trials to determine if the drug is safe and effective. These clinical trials involve a time-consuming and costly three-phase process that often overlap, can take many years to compile and are very expensive. These three phases, which are themselves subject to considerable regulation, are as follows:
| ● | Phase I. The drug is given to a small number of healthy human subjects or patients to test for safety, dose tolerance, pharmacokinetics, metabolism, distribution and excretion. |
| ● | Phase II. The drug is given to a limited patient population to determine the effect of the drug in treating the disease, the best dose of the drug, and the possible side effects and safety risks of the drug. |
| ● | Phase III. If a compound appears to be effective and safe in Phase II clinical trials, Phase III clinical trials are commenced to confirm those results. Phase III clinical trials are long-term, involve a significantly larger population, are conducted at numerous sites in different geographic regions and are carefully designed to provide reliable and conclusive data regarding the safety and benefits of a drug. It is not uncommon for a drug that appears promising in Phase II clinical trials to fail in the more rigorous and reliable Phase III clinical trials. |
If we believe that the data from the Phase III clinical trials show an adequate level of safety and effectiveness, we will file a new drug application (NDA) with the FDA seeking approval to sell the drug for a particular use. The FDA will review the NDA and often will hold a public hearing where an independent advisory committee of expert advisors asks additional questions regarding the drug. This committee makes a recommendation to the FDA that is not binding on the FDA but is generally followed. If the FDA agrees that the compound has met the required level of safety and effectiveness for a particular use, it will allow us to sell the drug in the United States for that use. It is not unusual, however, for the FDA to reject an application because it believes that the drug is not safe enough or effective enough or because it does not believe that the data submitted is reliable or conclusive.
At any point in this process, the development of a drug could be stopped for a number of reasons including safety concerns and lack of treatment benefit. We cannot be certain that any clinical trials that we are currently conducting or any that we conduct in the future, will be completed successfully or within any specified time period, or will be acceptable to the appropriate regulatory agency (e.g. CDSCO/DCGI in India) or FDA without further work. We may choose, or the FDA may require us, to delay or suspend our clinical trials at any time if it appears that the patients are being exposed to an unacceptable health risk or if the drug candidate does not appear to have sufficient treatment benefit.
The FDA may also require us to complete additional testing, provide additional data or information, improve our manufacturing processes, procedures or facilities or may require extensive post-marketing testing and surveillance to monitor the safety or benefits of our product candidates if it determines that our new drug application does not contain adequate evidence of the safety and benefits of the drug. In addition, even if the FDA approves a drug, it could limit the uses of the drug. The FDA can withdraw approvals if it does not believe that we are complying with regulatory standards or if problems are uncovered or occur after approval.
United States Review and Approval Process
After the completion of clinical trials of a product candidate, FDA approval of a NDA must be obtained before commercial marketing of the product. The NDA must include results of product development, laboratory and animal studies, human trials, information on the manufacture and composition of the product, proposed labeling and other relevant information as well as a significant user fee. The FDA may grant deferrals for submission of data, or full or partial waivers. The testing and approval processes require substantial time and effort and there can be no assurance that the FDA will accept the NDA for filing and, even if filed, that any approval will be granted on a timely basis, if at all.
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The FDA may refuse to file any NDA that it deems incomplete or not properly reviewable at the time of submission and may request additional information. Once the submission is accepted for filing, the FDA reviews the NDA to determine, among other things, whether the proposed product is safe, potent, and/or effective for its intended use, and has an acceptable purity profile, and whether the product is safe and effective for its intended use, and in each case, whether the product is being manufactured in accordance with cGMP or GTP, if applicable. During the product approval process, the FDA also will determine whether a Risk Evaluation and Mitigation Strategy, or REMS, is necessary to assure the safe use of the product. If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS. The FDA will not approve a NDA without a REMS, if required.
Notwithstanding the submission of relevant data and information, the FDA may ultimately decide that the NDA does not satisfy its regulatory criteria for approval and deny approval via a letter detailing such deficiencies. Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret the same data. If the FDA denies an application, the applicant may either resubmit the NDA, addressing all of the deficiencies identified by the FDA, or withdraw the application.
Expedited FDA Review Programs
The FDA has four expedited program designations -Fast Track, Breakthrough Therapy, Accelerated Approval, and Priority Review - to facilitate and expedite development and review of new drugs to address unmet medical needs in the treatment of serious or life-threatening conditions.
The Fast Track program that is intended to expedite or facilitate the process for reviewing new drug products that treat a serious condition and fill an unmet medical need. Fast Track designation applies to the combination of the product and the specific indication for which it is being studied. In Fast Track, the FDA may consider for “rolling review” of sections of the IND on a rolling basis before the complete application is submitted. Once a drug receives Fast Track designation, early and frequent communication between the FDA and a drug company is encouraged throughout the entire drug development and review process. The frequency of communication assures that questions and issues are resolved quickly, often leading to earlier drug approval and access by patients.
The FDA may also accelerate the approval of a designated drug through the Breakthrough Therapy designation by expediting the development and review of drugs that are intended to treat a serious condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on one or more clinically significant endpoints. If the FDA designates a drug as a breakthrough therapy, the drug is eligible for all Fast Track designation features, intensive guidance on an efficient drug development program, potentially beginning at Phase I and organizational commitment involving senior managers regarding the development of the drug to ensure that the development program and the design of the clinical trials is as efficient as practicable.
The Accelerated Approval designation allows the FDA to approve a product based on an effect on a surrogate or intermediate endpoint that is reasonably likely to predict a product’s clinical benefit and generally requires the manufacturer to conduct required post-approval confirmatory trials to verify the clinical benefit.
The Priority Review designation means that the FDA’s goal is to take action on the application within six months, compared to ten months under standard review.
Fast Track designation, Priority Review, Accelerated Approval and Breakthrough Therapy designations do not change the standards for approval but may expedite the development or approval process.
Orphan Drug Designation
The Orphan Drug Act provides granting special status to drugs or biological products for rare diseases and conditions affecting fewer than 200,000 persons. The first developer to receive FDA marketing approval for an orphan drug is entitled to a seven-year exclusive marketing period in the United States for that product where the FDA will not approve another version of the same product. However, a drug that the FDA considers to be clinically superior to, or different from, another approved orphan drug, even though for the same indication, may also obtain approval in the United States during the seven-year exclusive marketing period. In addition, if the holder of the orphan drug designation cannot assure the availability of sufficient quantities of their orphan drugs to meet the needs of patients, the FDA could also grant approval to another product.
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United States Post-Approval Requirements
Any products for which we receive FDA approvals are subject to continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, and complying with FDA promotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising, restrictions on promoting products for uses or in patient populations that are not described in the product’s approved uses, known as off-label use, limitations on industry-sponsored scientific and educational activities and requirements for promotional activities involving the internet.
In addition, quality control and manufacturing procedures must continue to conform to applicable manufacturing requirements after approval to ensure the long-term stability of the product. We rely, and expect to continue to rely, on third parties for the production of some, or all, clinical and commercial quantities of our products in accordance with cGMP and GTP regulations, as applicable. Manufacturers and other entities involved in the manufacture and distribution of approved products are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, GTP and other laws.
The FDA also may require post-marketing testing, known as Phase 4 testing, and surveillance to monitor the effects of an approved product. Discovery of previously unknown problems with a product or the failure to comply with applicable FDA requirements can have negative consequences, including adverse publicity, judicial or administrative enforcement, warning letters from the FDA, mandated corrective advertising or communications with doctors, and civil or criminal penalties, among others. Also, new government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our product candidates under development.
Regulatory Review and Approval Process in India
The Central Drugs Standard Control Organization (CDSCO) under Directorate General of Health Services, Ministry of Health & Family Welfare, Government of India is the National Regulatory Authority (NRA) of India. The Drug Controller General of India (DCGI) heads CDSCO. The Drugs & Cosmetics Act,1940 and rules 1945 have entrusted various responsibilities to central & state regulators for regulation of drugs & cosmetics. It envisages uniform implementation of the provisions of the Act & Rules made thereunder for ensuring the safety, rights and well-being of the patients by regulating the drugs and cosmetics. Under the Drugs and Cosmetics Act, CDSCO is responsible for approval of Drugs, Conduct of Clinical Trials, laying down the standards for Drugs, control over the quality of imported Drugs in the country and coordination of the activities of State Drug Control Organizations by providing expert advice with a view of bring about the uniformity in the enforcement of the Drugs and Cosmetics Act.
The regulatory process in India operates under ICH guidelines. After submission of a Clinical trial Application, the Office of DCGI reviews the application, and usually holds a briefing meeting with the Drug Sponsor. If satisfactory, the DCGI would approve the clinical trial application, generally with conditions that have to be satisfied prior to actually beginning dosing. There are requirements for interim reports as well as there are provisions for unannounced inspections. After completion of a given phase of clinical trial, the drug sponsor would then prepare a report and file for the next phase of clinical trials. In case of a health emergency, applications may be processed in an expedited timeframe and approvals for commercial use of the drug may be provided at the end of Phase II with requirements for further data collection. Normally, the new drug approval application would be submitted after completion of a Phase III clinical trial. Thereafter, the CDSCO and expert committees organized by the CDSCO will review the application for approval or denial.
Other Foreign Regulatory Review and Approval
Whether or not FDA approval has been obtained, approval of a product by comparable regulatory authorities in other countries will be necessary prior to commencement of marketing the product in such countries. The regulatory authorities in each country may impose their own requirements and may refuse to grant an approval, or may require additional data before granting it, even though the relevant product has been approved by the FDA or another authority. As with the FDA, the regulatory authorities in the European Union, China and other developed countries have lengthy approval processes for pharmaceutical products. The process for gaining approval in particular countries varies, but generally follows a similar sequence to that described for FDA approval.
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In the European Union, there is a centralized approval procedure that authorizes marketing of a product in all countries in the European Union (which includes most major countries in Europe). If this procedure is not used, under a decentralized system, an approval in one country of the European Union can be used to obtain approval in another country of the European Union under a simplified application process at present. After approval under the centralized procedure, pricing and reimbursement approvals are also required in most countries. These procedures are undergoing revision and modification at present. We have never received approval for a product in the European Union to date.
We must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of such product in those countries. The requirements and processes governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In addition, we, and our partners, may be subject to foreign laws and regulations and other compliance requirements, including, without limitation, anti-kickback laws, false claims laws and other fraud and abuse laws, as well as laws and regulations requiring transparency of pricing and marketing information and governing the privacy and security of personal information. If we, or our partners, fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.
Other Health Care Laws
In the event any of proposed products are ever approved for marketing, we may also be subject to healthcare regulation and enforcement by the federal government and the states and foreign governments where we may market our product candidates, if approved. These laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, physician sunshine and privacy and security laws and regulations.
In addition to obtaining FDA approval for each drug, we obtain FDA approval of the manufacturing facilities for any drug we sell, including those of companies who manufacture our drugs for us as well as our own and these facilities are subject to periodic inspections by the FDA. The FDA must also approve foreign establishments that manufacture products to be sold in the United States and these facilities are subject to periodic regulatory inspection.
We are also subject to other federal, state and local regulations regarding workplace safety and protection of the environment. We use hazardous materials, chemicals, viruses and various radioactive compounds in our research and development activities and cannot eliminate the risk of accidental contamination or injury from these materials. Any misuse or accidents involving these materials could lead to significant litigation, fines and penalties.
Time Schedules, Milestones and Development Costs
In the upcoming fiscal year, we hope to meet several important milestones towards establishing human proof-of-concept for the Nanoviricides Platform:
| ● | Completion of the final report of the Phase Ia/Ib clinical trial of the API NV-387, as drug products NV-CoV-2 Oral Syrup and NV-CoV-2 Oral Gummies. |
| ● | File an IND for RSV treatment for Phase I/Phase II human clinical trials for NV-387 as a treatment of RSV infection, and resources permitting, begin human clinical trials for RSV treatment indication. |
After the RSV program clinical trials are in progress, we plan on completing an effective clinical trial plan for our Shingles drug candidate to reengage human clinical trials for the shingles treatment program.
All of these studies are dependent on external collaborators providing available time slots for us. Thus, there can be delays in achieving the milestones that are beyond our control.
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We believe we have sufficient financing to complete the current Phase Ia/Ib human clinical trial of API NV-387 with a full report based on currently available finances. There is no assurance we will be successful in obtaining sufficient financing on terms acceptable to us to fund complete drug development through approval. We cannot provide assurance that our plans will not change or that changed circumstances will not result in the depletion of our capital resources more rapidly than we currently anticipate. We have estimated approximately $1,500,000 for the Phase II clinical trial for RSV indication. The total cost of the Phase II trial could be significantly more. If so, we may need to raise additional funds to support continued program development through Phase II and Phase III studies at least and revenue realization.
Drug Development Status
The Company has limited experience with pharmaceutical drug development. Thus, our budget estimates are not based on experience, but rather based on advice given by our associates and consultants. As such, these budget estimates may not be accurate. In addition, the actual work to be performed is not known at this time, other than a broad outline, as is normal with any scientific work. As further work is performed, additional work may become necessary or change in plans or workload may occur. Such changes may have an adverse impact on our estimated budget, and our projected timeline of drug development.
The work-plan we have developed for the next twelve months is expected to enable us to complete the Phase Ia/Ib clinical trial of API NV-387 with a final report and, provided that our clinical plan is approved by the regulatory agency, to begin Phase II human clinical trials for RSV indication. Given our dependence on external collaborators for the regulatory affairs, IND-enabling studies and study reports, Clinical Trial CROs and other services providers, we cannot provide time estimates. Our work-plan is extremely dependent on external factors, collaborations, and unanticipated delays can occur. We are experiencing extreme staffing constraints as well as facility and resources constraints. We note as a risk factor that these resource constraints may cause further delays in our estimated timelines.
We have taken on the most important risk in nanomedicines, that of enabling cGMP manufacture, to achieve consistent product from batch to batch, “head on” so to speak. Having established critical quality parameters in our manufacturing processes and having accomplished cGMP-compliant scale-up of manufacturing from starting materials to API to formulation to fill-finish-packaged-labeled drug products, we believe that we have minimized the risk related to manufacturing capabilities.
During the scale up and optimization of our production level operations, we continue to work on a number of different polymer backbones (“nanomicelles”) and several antiviral ligands in order to make sure that different formulation and pharmacokinetic-pharmacodynamic (PK-PD) needs can be met during the PK-PD programs for our various drug candidates. While this loads up our initial activities, it is expected to minimize the risk for further drug development towards IND or regulatory filings by making available backup drug candidates with different PK-PD profiles.
Our work-plan is expected to reduce certain risks of drug development. We believe that the data we have collected particularly for the manufacture of NV-387 drug substance and drug products, and the non-clinical studies of NV-387, will enable us to file appropriate IND application(s) to the FDA for the RSV indications. We believe that in the ensuing fiscal year we will be able to obtain valuable information on the safety and tolerability of NV-387 in humans. Additionally, we believe that we may be able to begin Phase II evaluation of efficacy of NV-387 in RSV infected adults in the ensuing year, resources permitting. If our human clinical trials RSV program are not successful, we will have to develop additional drug candidates and perform further studies, or further advance our other programs, for example, Influenza, VZV, HSV-1 or HSV-2 drug candidates, into human clinical trials. If our studies are successful, we would be more confident in further developing our, RSV, FluCide, HerpeCide as well as other program drug candidates and may be in a position to re-engage our highly valuable drug programs including HIVCide.
Based on our pre-clinical study data, and based on our own studies of approved drugs in the COVID-19 space, we believe that we have a very high probability that NV-CoV-2 would be demonstrated to be a highly effective and safe drug for the treatment of most if not all Coronavirus infections including SARS-CoV-2 (COVID-19) as well as seasonal coronaviruses, in most if not all segments of the human population including pediatric, geriatric, immune-compromised, and other high risk and low risk populations.
We further believe NV-387 could be a revolutionary drug for the treatment of pediatric RSV infections, based on our data that NV-387 treatment appears to have cured mice of lethal lung RSV infection, with no lung damage.
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We intend to pursue non-diluting funding sources such as government grants and contracts as well as licensing agreements with other pharmaceutical companies for further development of NV-387 and other drugs in our pipeline. We intend to use equity-based and debt financing, as required, to fund the operations and to raise additional capital for conducting human clinical trials as we advance our pipeline further towards regulatory approvals. There can be no assurance that we will be able to obtain the additional financial resources necessary to fund our anticipated obligations over the next year.
We are a clinical stage company and will continue in this drug development stage until generating revenues from the sales of our products or services.
Our Collaborations and Service Contract Agreements
Our development model is to employ collaborations and service contract relationships with renowned academic labs, government labs, as well as service contracts with external service providers in order to minimize our capital requirements.
All of our agreements provide for the evaluation of nanoviricides substances created and provided by us to the Laboratory (or Collaborator). In general, the Laboratory is compensated for certain material and personnel costs for these evaluations. The evaluations involve in vitro and in vivo scientific studies at the Laboratory using their established protocols. In some cases, we provide scientific input regarding certain modifications to their protocols as may be needed. The Laboratory returns the results and data to us. The Laboratory is allowed to publish the results after allowing time for us to protect intellectual property (IP) as needed. We send nanoviricides as well as positive control (i.e. known therapeutics) and negative control (i.e. known not to work) compounds as needed in a fully formulated, ready to use form, to the Laboratory. All IP related to the nanoviricide materials, their formulations and reformulations, and their usage, rests with us. Any IP developed by the Laboratory regarding their own know-how, such as laboratory tests and protocols, their modifications, etc. rests with the Laboratory. Joint inventions are treated as per applicable US Laws.
We try to choose the scientific laboratories with the most appropriate facilities and know-how relating to a particular field for the evaluation of an antiviral agent developed by us. In addition, we try to work with more than one laboratory for the evaluation of an antiviral agent developed by us. We also try to work with more than one laboratory for a given group of viruses whenever possible. We seek to improve confidence by obtaining independent datasets for corroboration of the efficacy and safety of the nanoviricides we develop. Further, we try to minimize dependence on a particular Laboratory for the development of any specific drug candidate in our product pipeline.
To date, we have engaged in GLP and non-GLP Efficacy and Safety evaluations in both in vitro (cell culture models, pseudovirion models) and in vivo (animal models) of our different nanoviricide research materials and drug candidates at different laboratories. NV-387 has progressed into clinical stage and we are gearing towards final report of the Phase Ia/Ib human clinical trial evaluating safety and tolerability of oral formulations of NV-387 in healthy subjects.
Related Parties
TheraCour Pharma, Inc.
Pursuant to an exclusive license agreement we entered into with TheraCour, the Company was granted exclusive licenses for technologies developed by TheraCour for the virus types: Human Immunodeficiency Virus (HIV/AIDS), Influenza including Asian Bird Flu Virus, Herpes Simplex Virus (HSV-1 and HSV-2), Hepatitis C Virus (HCV), Hepatitis B Virus (HBV), and Rabies. The Company has entered into an Additional License Agreement with TheraCour granting the Company the exclusive licenses for technologies developed by TheraCour for the additional virus types for Dengue viruses, Japanese Encephalitis virus, West Nile Virus, Viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes, and Ebola/Marburg viruses.
On November 1, 2019, the Company entered into an Agreement with TheraCour for an exclusive, worldwide license to use, promote, offer for sale, import, export, sell and distribute products for the treatment of VZV derived indications. The Company was not required to make any upfront payments to TheraCour and agreed to milestone payments to TheraCour.
TheraCour has not denied any licenses sought by the Company in the past.
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On September 7, 2021, the Company entered into a license agreement with TheraCour for an exclusive, worldwide license to use, promote, offer for sale, import, export, sell and distribute products for the field comprising anti-viral treatments for coronavirus derived human infections (the “COVID License Agreement”). The licensed field includes antiviral drugs to treat SARS-CoV-2 and its variants that cause the COVID-19 disease resulting in a global pandemic that continues to rage through the world, wave after wave, as new variants develop and take hold. There was no upfront cash payment for the license and the compensation terms were generally consistent with prior licenses, and are summarized below.
Under the COVID License Agreement, we have obtained a world-wide, exclusive, sub-licensable, license to use, promote, offer for sale, import, export, sell and distribute antiviral drugs that treat human Coronavirus infections using TheraCour’s proprietary as well as patented technology and intellectual property, including the new patent application cited above. The discovery of ligands and polymer materials as well as formulations, the chemistry and chemical characterization, as well as process development and related work will be performed by TheraCour under the same compensation terms as prior agreements between the parties, with no duplication of costs allowed. We will not make any upfront cash payments to TheraCour and we have agreed to the following milestone payments to TheraCour: 100,000 shares of the Company’s Series A preferred stock, par value $0.00001 per share (the “Series A preferred stock”) upon the execution of the Agreement; 50,000 shares of Series A preferred stock after the grant of the approval of Licensee’s Investigational New Drug (IND) Application, or its equivalent; cash payments of $1,500,000 after the initiation of Phase I clinical trials or its equivalent; $2,000,000 after the completion of Phase I clinical trials or its equivalent for at least one product within twelve (12) months from the date of the acceptance of the IND; $2,500,000 no later than six (6) months after the completion of Phase IIA clinical trials or its equivalent for at least one product within twenty (24) months from the date of the completion of Phase I or its equivalent; 100,000 shares of Series A preferred stock after the initiation of Phase III clinical trials or its equivalent; and, at TheraCour’s option, $5,000,000 in cash or 500,000 shares of Series A preferred stock, no later than six (6) months after the completion of Phase III clinical trials or its equivalent for at least one product within thirty-six (36) months from the completion of Phase II clinical trials or its equivalent. In addition, we agreed to pay to TheraCour fifteen percent (15%) of income from licensed products and any income from sublicensed products, consistent with previous agreements. Under the COVID License Agreement, TheraCour retains the exclusive right to develop and manufacture the licensed products. The Agreement contemplates that the parties will enter into a separate manufacturing and supply agreement for the commercial manufacture and supply of the drug products if and when we intend to engage into commercialization of the drugs. The COVID License Agreement provides that the manufacturing and supply agreement would be on customary and reasonable terms, on a cost-plus basis, using a market rate based on then-current industry standards, and include customary backup manufacturing rights, as with prior agreements. The Series A Preferred Stock are only convertible upon a “change of control” of the Company as defined in its full specification, are non-transferrable and have no trading market. Each share of Series A preferred stock votes at the rate of 9 votes per share, and is convertible only upon a change of control into 3.5 shares of the Company’s common stock.
To assist in the analysis of the terms of the COVID License Agreement, we commissioned research reports on Coronavirus drug market sizes for the Coronavirus antiviral field from an independent consulting agency, Nanotech Plus, LLC. Additionally, we obtained business analysis and valuation reports for potential licensing terms for a coronavirus drug from an independent consultant. NanoViricides was represented by McCarter & English, LLP while TheraCour was represented by DuaneMorris LLP.
In consideration for the COVID License Agreement, the Company issued 100,000 shares of the Company’s Series A Preferred Stock upon execution of the agreement in 2021. The Company also issued 50,000 shares of the Company’s Series A preferred stock upon the grant of an IND to perform clinical trials which are being sponsored by our licensee and collaborator KMPL in India, in April 2023. On June 19, 2023, the Company was notified that the Company’s licensee, KMPL had commenced volunteer recruitments for Phase Ia/Ib clinical trials of the NV-CoV-2 Oral Syrup and NV-CoV-2 Oral Gummies. Pursuant to the COVID License Agreement a third milestone payment of $1,500,000 became due 5 days after the start of Phase Ia/Ib clinical trials.
On July 19, 2023, the Company entered into an agreement with TheraCour, to accept the Company’s unsecured convertible promissory note (the “Note”) in payment of the milestone award. The Note accrued simple interest at the rate of 12% per annum and was due and payable on January 19, 2025, the maturity date. The principal of the Note is convertible, at TheraCour’s option, into 331,859 shares of the Company’s Series A Preferred Stock, par value $0.00001 at the conversion price, specified as the fair value of the Series A shares on July 19, 2023 in the terms and conditions contained within the Note. On October 27, 2023, TheraCour exercised its right to convert the principal of the July 19, 2023 Note into 331,859 shares of the Company’s Series A Preferred Stock. Furthermore, TheraCour cancelled all of the accrued interest on the Note totaling $49,808 which has been reported as a capital transaction credit to additional paid in capital on the accompanying statements of changes in stockholders’ equity. Total interest incurred under the Note for the year ended June 30, 2024 was $49,808.
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On February 12, 2024, the Company entered into an Amendment to the COVID License Agreement with TheraCour dated September 7, 2021, whereby any further cash milestone payments that would be earned upon milestone event would only become payable upon the Company having sufficient revenues, with only a portion of revenues to be used for satisfying such milestone payments.
By signing on September 23, 2024, and being effective as of September 20, 2024 the Company entered into a “Memorandum of Understanding for All Antivirals Drug Development” (the “MOU”) with TheraCour that granted to the Company, a limited, non-assignable, non-sublicensable, exclusive right of first refusal to License to any antiviral drugs in development or to be developed by TheraCour for research and development purposes only, for all as-yet unlicensed viral infection treatment indications. The MOU also clarified the roles and responsibilities of the Parties and essentially codified the process that the Parties have adopted since inception. The MOU further codified the treatment of all future milestone payments arising from any current or future license agreements to TheraCour to be consistent with the principles adopted in the February 12, 2024 Amendment to the COVID License Agreement.
Development fees and other costs charged by TheraCour for the years ended June 30, 2024 and 2023 were approximately $2,550,000 and $2,536,000, respectively. At June 30, 2024, approximately $720,000, was due to TheraCour.
No royalties are due TheraCour from the Company’s inception through June 30, 2024.
TheraCour is affiliated with the Company through Dr. Anil Diwan, our Founder, President, and Executive Chairman, who owns approximately 90% of the capital stock of TheraCour which itself owns 470,961 shares of the Company’s outstanding common stock and 681,859 shares of the Company’s Series A preferred stock as of June 30, 2024.
Line of Credit - Related Party – Anil Diwan
On November 13, 2023, the Company’s President and CEO, Dr. Anil Diwan, entered into a Line of Credit Agreement whereby Dr. Diwan agreed to provide a standby Line of Credit to the Company in the maximum amount of $2,000,000. All amounts outstanding under the Line of Credit, including principal, accrued interest and other fees and charges, will be due and payable on December 31, 2024. Amounts drawn down under the Line of Credit shall bear interest at a fixed rate of 12%. Advancements under the Line of Credit will be collateralized by an Open End Mortgage Deed on the Company’s real property at 1 Controls Drive, Shelton, Connecticut and a Chattel Mortgage (U.C.C - 1 filing) against the Company’s equipment and fixtures. Any draw down under the Line of Credit requires the approval of the Company’s Board of Directors. On February 12, 2024, the Company, pursuant to Article 2.5 of the Company’s Line of Credit Agreement with Dr. Anil Diwan, signed an Extension Agreement which extended the maturity of the Company’s Line of Credit from December 31, 2024 to December 31, 2025. There were no other amendments to the original Line of Credit. By signing pn September 23, 2024 and being effective as September 20, 2024 the Company, pursuant to Article 2.5 of the Company’s Line of Credit Agreement with Dr. Anil Diwan, signed an Amendment Agreement which increased the available line of credit from $2 million to $3 million, and extended the maturity of the Company’s Line of Credit from December 31, 2025 to March 31, 2026.
The Company has not drawn against the Line of Credit facility as of June 30, 2024.
Karveer Meditech, Private Limited (KMPL)
On March 27, 2023 the Company entered into a License Agreement with KMPL, wherein the Company granted to KMPL a limited, non-transferable, exclusive license for the use, sale, or offer of sale in India of the Company’s two clinical test drug candidates titled as NV-CoV-2 and NV-CoV-2-R for the treatment of COVID-19 in patients in India (“KMPL COVID License”). KMPL has engaged in further drug development in India including sponsoring of drug candidates for human clinical trials in India and is acting as clinical trials manager for such clinical trials. KMPL is in the process of establishing a manufacturing plant for some of those medicines. KMPL shall provide NanoViricides with all reports of the clinical trials and the Company has the rights to use such reports for further advancement of the drug candidates with regulatory authorities outside India. In consideration, KMPL will be reimbursed by the Company for all direct and indirect costs incurred for the clinical trials and development activities with a customary clinical trials manager fee of thirty (30%) of such costs and applicable taxes. Upon commercial sales of any resulting approved drugs, KMPL will pay the Company a royalty of seventy percent (70%) of the final invoiced sales less the cost of sales and goods sold to unaffiliated third parties. On June 19, 2023 KMPL commenced the equivalent of Phase I clinical trials in India. The Company has incurred clinical trial costs to KMPL of $442,845 and $100,000 for the years ended June 30, 2024 and 2023 respectively, As of June 30, 2024 and 2023, respectively, $227,435 and $100,000 of such costs were accrued by the Company pursuant to the license agreement between the Company and KMPL.
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KMPL is owned by the Diwan family, consisting of four siblings and their immediate families. Dr. Diwan has an undivided share in the Diwan family interest in KMPL. The number of shares is not currently available. Consequent to and subsequent to the KMPL COVID License, KMPL is deemed to be a related party.
Meeta Vyas
Meeta Vyas is the Company’s Chief Financial Officer and is married to Dr. Anil Diwan. Due to her marriage to Dr. Anil Diwan, Meeta Vyas is deemed to be a related party,
Employees
As of June 30, 2024, the Company had approximately seven full-time employees. In addition, most of the business activities of the Company including accounting and legal work and business development are provided by subcontractors and consultants. Further, the Company has subcontracted nanomaterials research and development (“R&D”) to TheraCour under the license agreement with TheraCour. The Company has subcontracted its animal studies to various contract research organizations, government institutes, academic labs, and private institutions. In the future, the Company anticipates having additional service providers. We believe that we have good relations with our employees and subcontractors.
Reports to Security Holders
The public may read and copy any materials the Company files with the Securities and Exchange Commission (the “Commission”) at the Commission’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0030. The Commission maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission. Information about the Company is also available on its website at www.nanoviricides.com. Information included on the website is not part of this Form 10-K.
Further, the Company’s common stock is listed on the NYSE-American. The NYSE-American Exchange requires additional corporate governance, financial and reporting requirements.
The Company is fully compliant with the requirements of the NYSE-American regarding requirements for independent board members and board committee compositions.
Website
Our website address is www.nanoviricides.com. Information on our website is not incorporated by reference herein.
We intend to make available through our website, all of our filings with the Commission and all amendments to these reports as soon as reasonably practicable after filing, by providing a hyperlink to the EDGAR website containing our reports.
Our Contact Information
Our principal executive offices are currently located at 1 Controls Drive, Shelton, Connecticut 06484 and our telephone number is (203) 937-6137 (voicemail). We can be contacted by email at info@nanoviricides.com.
Description of Property
The Company’s principal executive offices are located at 1 Controls Drive, Shelton, CT, and include approximately 18,000 square feet of office, laboratory, and cGMP-capable drug manufacturing space. These facilities are fully owned by the Company, and not subject to any mortgage or debt.
We subcontract the laboratory research and development work to TheraCour, pursuant to the License Agreement with TheraCour. The work is performed in our own laboratory facility in Shelton, CT. Management believes that the space is sufficient for the Company to monitor the developmental progress at its subcontractors.
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Legal Proceedings
From time to time, we are subject to various legal proceedings arising in the ordinary course of business, including proceedings for which we have insurance coverage. There are no pending legal proceedings against the Company to the best of the Company’s knowledge as of the date hereof and to the Company’s knowledge no action, suit or proceeding has been threatened against the Company that we believe will have a material adverse effect to our business, financial position, results of operations, or liquidity.
ITEM 1A. RISK FACTORS
Our business, financial condition, operating results and prospects are subject to the following risks. Additional risks and uncertainties not presently foreseeable to us may also impair our business operations. If any of the following risks or the risks described elsewhere in this report actually occurs, our business, financial condition or operating results could be materially adversely affected. In such case, the trading price of our common stock could decline, and our stockholders may lose all or part of their investment in the shares of our common stock.
This Form 10-K contains forward-looking statements that involve risks and uncertainties. These statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “intends,” “plans,” “may,” “will,” “should,” “predict” or “anticipation” or the negative thereof or other variations thereon or comparable terminology. Actual results could differ materially from those discussed in the forward-looking statements as a result of certain factors, including those set forth below and elsewhere in this Form 10-K.
Summary of Risk Factors
Our business is subject to numerous risks and uncertainties that you should consider before investing in our common stock. Some of the principal risk factors that make an investment in the Company speculative or risky are summarized as follows:
| ● | Our company is in the developmental stage and has no products approved for commercial sale, no generated revenue, and may never achieve profitability. |
| ● | The Company will need to raise substantial additional capital in the future to fund operations. |
| ● | Due to the nature of the process involved in the development process of pharmaceuticals, the Company can provide no assurance of the successful and timely development of new drugs. |
| ● | The Company must comply with significant and complex government regulations, which may delay or prevent the commercialization of drug candidates. |
| ● | The Company can provide no assurance that drug candidates will obtain regulatory approval or that the results of clinical studies will be favorable. |
| ● | In the event that regulatory approvals are obtained, drug candidates will be subject to regulatory review. Failing to comply with U.S. and foreign regulations could result in loss of approvals to market such drugs and would harm the business. |
| ● | Development of drug candidates requires significant research and development, which will lead to significant research and development costs. |
| ● | The Company will be unable to proceed with its business plan without obtaining additional financing. |
| ● | The Company has limited experience in conducting or supervising clinical trials and must outsource clinical trials. Additionally, we lack suitable facilities for clinical testing which leads to a reliance on third parties. |
| ● | The Company may be unable to attract or retain and motivate skilled personnel which will delay product development programs and research and development efforts. |
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| ● | The Company has no sales or marketing personnel. |
| ● | The Company’s collaborative relationships with third parties could cause the Company to expend significant resources and incur substantial business risk with no assurance of financial return. |
| ● | The Company may be liable for damages caused by biological and hazardous material. |
| ● | The Company depends on senior management and their loss or unavailability could put the Company at a competitive disadvantage. |
| ● | There exist conflicts of interest among officers, directors and stockholders. |
| ● | Risks relating to dependence on U.S. government contracts. |
| ● | Company common stock may be considered “penny stock”. |
| ● | Management of the Company has identified a material weakness in internal controls that if not remediated could result in material misstatements in our financial statements. |
These and other material risks we face are described more fully herein which investors should carefully review prior to making an investment decision with respect to the Company or its securities.
Risks Specific to Our Business
Our company is a development stage company that has no products approved for commercial sale, never generated any revenues and may never achieve revenues or profitability.
Our company is a development stage company that has no products approved for commercial sale, never generated any revenues and may never achieve revenues or profitability. Our ability to generate revenue depends heavily on:
| ● | demonstration and proof of principle in pre-clinical trials that a nanoviricide is safe and effective; |
| ● | successful development of our first product candidate in our pipeline; |
| ● | our ability to seek and obtain regulatory approvals, including with respect to the indications we are seeking; |
| ● | the successful commercialization of our product candidates; and |
| ● | market acceptance of our products. |
All of our existing product candidates are in early stages of development. It will be several years, if ever, until we have a commercial drug product available for resale. If we do not successfully develop and commercialize these products, we will not achieve revenues or profitability in the foreseeable future, if at all. If we are unable to generate revenues or achieve profitability, we may be unable to continue our operations.
We are a clinical drug development stage company with a limited operating history, making it difficult for you to evaluate our business and your investment. Our proposed products are subject to all of the risks inherent in the establishment of a new business enterprise, including but not limited to:
| ● | the absence of an operating history; |
| ● | the lack of commercialized products; |
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| ● | insufficient capital; |
| ● | expected substantial and continual losses for the foreseeable future; |
| ● | limited experience in dealing with regulatory issues; the lack of manufacturing experience and limited marketing experience; |
| ● | an expected reliance on third parties for the development and commercialization of our proposed products; |
| ● | a competitive environment characterized by numerous, well-established and well capitalized competitors; |
| ● | reliance on key personnel. |
Because we are subject to these risks, you may have a difficult time evaluating our business and your investment in our company.
Our ability to become profitable depends primarily on the following factors:
| ● | our ability to develop drugs, obtain approval for such drugs, and if approved, to successfully commercialize our nanoviricide drug(s); |
| ● | our R&D efforts, including the timing and cost of clinical trials; and |
| ● | our ability to enter into favorable alliances with third parties who can provide substantial capabilities in clinical development, regulatory affairs, sales, marketing and distribution. |
Even if we successfully develop and market our drug candidates, we may not generate sufficient or sustainable revenue to achieve or sustain profitability.
We have incurred significant operating losses and may not ever be profitable. As of June 30, 2024, we had a cash and cash equivalent balance of $4,797,778. Also, we have incurred significant operating losses since its inception, resulting in an accumulated deficit of $139,374,895 at June 30, 2024. Such losses are expected to continue for the foreseeable future.
We will need to raise substantial additional capital in the future to fund our operations and we may be unable to raise such funds when needed and on acceptable terms.
Management believes that the Company’s cash and cash equivalents balance of approximately $4.8 million, additional capital raised of approximately $1.5 million by ATM sales of our common stock from July 1, 2024 through September 10, 2024, and the Company’s existing resources, including availability under its $3 million line of credit will not be sufficient to fund the Company’s planned operations and expenditures for at least 12 months from the date of the filing of this Form 10-K. As a result substantial doubt exists about the Company’s ability to continue as a going concern. Management is actively exploring additional required funding through non-dilutive grants and contracts, partnering, debt or equity financing pursuant to its plan. There is no assurance that we will be successful in obtaining sufficient financing on terms acceptable to us to fund continuing operations.
We cannot provide assurance that the Company’s plans will not change or that changed circumstances will not result in the depletion of its capital resources more rapidly than it currently anticipates.
In the event that we cannot obtain acceptable financing, or that we are unable to secure additional financing on acceptable terms, we would be unable to complete development of our various drug candidates. This would necessitate implementing staff reductions and operational adjustments that would include reductions in the following business areas:
| ● | research and development programs; |
| ● | preclinical studies and clinical trials; material characterization studies, regulatory processes; |
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| ● | a search for third party marketing partners to market our products for us. |
The amount of capital we may need will depend on many factors, including the:
| ● | progress, timing and scope of our research and development programs; |
| ● | progress, timing and scope of our preclinical studies and clinical trials; |
| ● | time and cost necessary to obtain regulatory approvals; |
| ● | time and cost necessary to establish our own marketing capabilities or to seek marketing partners; |
| ● | time and cost necessary to respond to technological and market developments; |
| ● | changes made or new developments in our existing collaborative, licensing and other commercial relationships; and |
| ● | new collaborative, licensing and other commercial relationships that we may establish. |
Our fixed expenses, such as real estate taxes and facility and equipment maintenance, rent, and other contractual commitments, may increase in the future, as we may:
| ● | enter into leases for new facilities and capital equipment; |
| ● | enter into additional licenses and collaborative agreements; and |
| ● | incur additional expenses associated with being a public company. |
We have limited experience in drug development, and may not be able to successfully develop any drugs.
Our ability to achieve revenues and profitability in our business will depend, among other things, on our ability to:
| ● | develop products internally or obtain rights to them from others on favorable terms; |
| ● | complete laboratory testing and human studies; |
| ● | obtain and maintain necessary intellectual property rights to our products; |
| ● | successfully complete regulatory review to obtain requisite governmental agency approvals; |
| ● | enter into arrangements with third parties to manufacture our products on our behalf; and |
| ● | enter into arrangements with third parties to provide sales and marketing functions. |
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Development of pharmaceutical products is a time-consuming process, subject to a number of factors, many of which are outside of our control. Consequently, we can provide no assurance of the successful and timely development of new drugs.
Our drug candidates are in their clinical and pre-clinical developmental stages. Further development and extensive testing will be required to determine their technical feasibility and commercial viability. Our success will depend on our ability to achieve scientific and technological advances and to translate such advances into reliable, commercially competitive drugs on a timely basis. Drugs that we may develop are not likely to be commercially available for several years. The proposed development schedules for our drug candidates may be affected by a variety of factors, including technological difficulties, proprietary technology of others, and changes in government regulation, many of which will not be within our control. Any delay in the development, introduction or marketing of our drug candidates could result either in such drugs being marketed at a time when their cost and performance characteristics would not be competitive in the marketplace or in the shortening of their commercial lives. In light of the long-term nature of our projects, the unproven technology involved and the other factors described elsewhere in “Risk Factors”, we may not be able to complete successfully the development or marketing of any drugs.
We may fail to successfully develop and commercialize our drug candidates if they:
| ● | are found to be unsafe or ineffective or fail to meet the appropriate endpoints in clinical trials; |
| ● | do not receive necessary approval from the FDA or foreign regulatory agencies; |
| ● | fail to conform to a changing standard of care for the diseases they seek to treat; or |
| ● | are less effective or more expensive than current or alternative treatment methods. |
Drug development failure can occur at any stage of clinical trials and as a result of many factors and there can be no assurance that we or our collaborators will reach our anticipated clinical targets. Even if we or our collaborators complete our clinical trials, we do not know what the long-term effects of exposure to our drug candidates will be. Furthermore, our drug candidates may be used in combination with other treatments and there can be no assurance that such use will not lead to unique safety issues. Failure to complete clinical trials or to prove that our drug candidates are safe and effective would have a material adverse effect on our ability to generate revenue and could require us to reduce the scope of or discontinue our operations.
We have limited manufacturing expertise and we may have to rely on external manufacturers.
We believe that the technology we use to manufacture our products and compounds is proprietary, although some of the generalities are patented or patent-pending. For our products, we may have to disclose all necessary aspects of this technology to contract manufacturers to enable them to manufacture the products and compounds for us. We plan to have discussions with manufacturers under non-disclosure and non-compete agreements that are intended to restrict them from using or revealing this technology, but we cannot be certain that these manufacturers will comply with these restrictions. In addition, these manufacturers could develop their own technology related to the work they perform for us that we may need to manufacture our products or compounds. We could be required to enter into an agreement with that manufacturer if we wanted to use that technology ourselves or allow another manufacturer to use that technology. The manufacturer could refuse to allow us to use their technology or could demand terms to use their technology that are not acceptable.
We must comply with significant and complex government regulations, compliance with which may delay or prevent the commercialization of our drug candidates.
The R&D, manufacture and marketing of drug candidates are subject to regulation, primarily by the FDA in the United States and by comparable authorities in other countries. These national agencies and other federal, state, local and foreign entities regulate, among other things, R&D activities (including testing in primates and in humans) and the testing, manufacturing, handling, labeling, storage, record keeping, approval, advertising and promotion of the products that we are developing. Noncompliance with applicable requirements can result in various adverse consequences, including approval delays or refusals to approve drug licenses or other applications, suspension or termination of clinical investigations, revocation of approvals previously granted, fines, criminal prosecution, recalls or seizures of products, injunctions against shipping drugs and total or partial suspension of production and/or refusal to allow a company to enter into governmental supply contracts.
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The process of obtaining FDA approval has historically been costly and time consuming. Current FDA requirements for a new human drug or biological product to be marketed in the United States include: (1) the successful conclusion of pre-clinical laboratory and animal tests, if appropriate, to gain preliminary information on the product’s safety; (2) filing with the FDA of an IND application to conduct human clinical trials for drugs or biologics; (3) the successful completion of adequate and well-controlled human clinical investigations to establish the safety and efficacy of the product for its recommended use; and (4) filing by a company and acceptance and approval by the FDA of a New Drug Application, or NDA, for a drug product or a biological license application, or BLA, for a biological product to allow commercial distribution of the drug or biologic. A delay in one or more of the procedural steps outlined above could be harmful to us in terms of getting our drug candidates through clinical testing and to market.
The FDA reviews the results of the clinical trials and may order the temporary or permanent discontinuation of clinical trials at any time if it believes the drug candidate exposes clinical subjects to an unacceptable health risk. Investigational drugs used in clinical studies must be produced in compliance with current good manufacturing practice, or GMP, rules pursuant to FDA regulations.
Sales outside the United States of products that we develop will also be subject to regulatory requirements governing human clinical trials and marketing for drugs and biological products and devices. The requirements vary widely from country to country, but typically the registration and approval process takes several years and requires significant resources. In most cases, even if the FDA has not approved a product for sale in the United States, the product may be exported to any country if it complies with the laws of that country and has valid marketing authorization by the appropriate authority. There are specific FDA regulations that govern this process.
We also are subject to the following risks and obligations, related to the approval of our products:
| ● | The FDA or foreign regulators may interpret data from pre-clinical testing and clinical trials in different ways than we interpret them. |
| ● | If regulatory approval of a product is granted, the approval may be limited to specific indications or limited with respect to its distribution. |
| ● | In addition, many foreign countries control pricing and coverage under their respective national social security systems. |
| ● | The FDA or foreign regulators may not approve our manufacturing processes or manufacturing facilities. |
| ● | The FDA or foreign regulators may change their approval policies or adopt new regulations. |
| ● | Even if regulatory approval for any product is obtained, the marketing license will be subject to continual review, and newly discovered or developed safety or effectiveness data may result in suspension or revocation of the marketing license. |
| ● | If regulatory approval of the product candidate is granted, the marketing of that product would be subject to adverse event reporting requirements and a general prohibition against promoting products for unapproved or “off-label” uses. |
| ● | In some foreign countries, we may be subject to official release requirements that require each batch of the product we produce to be officially released by regulatory authorities prior to its distribution by us. |
| ● | We will be subject to continual regulatory review and periodic inspection and approval of manufacturing modifications, including compliance with current GMP regulations. |
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We can provide no assurance that our drug candidates will obtain regulatory approval or that the results of clinical studies will be favorable.
The testing, marketing and manufacturing of any product for use in the United States will require approval from the FDA. We cannot predict with any certainty the amount of time necessary to obtain such FDA approval and whether any such approval will ultimately be granted. Preclinical and clinical trials may reveal that one or more products are ineffective or unsafe, in which event further development of such products could be seriously delayed or terminated. Moreover, obtaining approval for certain products may require testing on human subjects of substances whose effects on humans are not fully understood or documented. Delays in obtaining FDA or any other necessary regulatory approvals of any proposed drug and failure to receive such approvals would have an adverse effect on the drug’s potential commercial success and on our business, prospects, financial condition and results of operations. In addition, it is possible that a proposed drug may be found to be ineffective or unsafe due to conditions or facts that arise after development has been completed and regulatory approvals have been obtained. In this event, we may be required to withdraw such proposed drug from the market. To the extent that our success will depend on any regulatory approvals from government authorities outside of the United States that perform roles similar to that of the FDA, uncertainties similar to those stated above will also exist.
Preclinical and clinical studies of our product candidates may not be successful. If we are unable to generate successful results from preclinical and clinical studies of our product candidates, or experience significant delays in doing so, our business may be materially harmed.
We have no products on the market and except NV-CoV-2 (NV-387) which is in Phase Ia/Ib clinical trials, all of our other product candidates are in preclinical development. In particular, none of our product candidates, other than NV-CoV-2 (NV-387), have ever been tested in a human subject. Our ability to achieve and sustain profitability depends on obtaining regulatory approvals for and, if approved, successfully commercializing our product candidates, either alone or with third parties. Before obtaining regulatory approval for the commercial distribution of our product candidates, we or an existing or future collaborator must conduct extensive preclinical tests and clinical trials to demonstrate the safety, purity and potency of our product candidates.
The success of our product candidates will depend on several factors, including the following:
| ● | successfully designing preclinical studies which may be predictive of clinical outcomes; |
| ● | successful results from preclinical and clinical studies; |
| ● | receipt of marketing approvals from applicable regulatory authorities; |
| ● | obtaining and maintaining patent and trade secret protection for future product candidates; |
| ● | establishing and maintaining manufacturing relationships with third parties or establishing our own manufacturing capability; and |
| ● | successfully commercializing our products, if and when approved, whether alone or in collaboration with others. |
If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully complete the development or commercialization of our product candidates, which would materially harm our business.
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Because the results of preclinical testing are not necessarily predictive of future results, our products may not have favorable results in our planned clinical trials.
Even if we have positive results from our preclinical testing of our products, this may not necessarily be predictive of the results from our planned clinical trials in humans. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical trials after achieving positive results in preclinical development, and we cannot be certain that we will not face similar setbacks. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain FDA approval. If we fail to produce positive results in our clinical trials, the development timeline and regulatory approval and commercialization prospects for our products, and, correspondingly, our business and financial prospects, would be materially adversely affected.
Even if we obtain regulatory approvals, our marketed drug candidates will be subject to ongoing regulatory review. If we fail to comply with continuing U.S. and foreign regulations, we could lose our approvals to market these drugs and our business would be seriously harmed.
Following any initial regulatory approval of any drugs we may develop, we will also be subject to continuing regulatory review, including the review of adverse experiences and clinical results that are reported after our drug candidates are made commercially available. This would include results from any post-marketing tests or vigilance required as a condition of approval. The manufacturer and manufacturing facilities we use to make any of our drug candidates will also be subject to periodic review and inspection by the FDA. The discovery of any previously unknown problems with the drug, manufacturer or facility may result in restrictions on the drug or manufacturer or facility, including withdrawal of the drug from the market. If we are required to withdraw all or more of our drugs from the market, we may be unable to continue revenue-generating operations. Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured drugs ourselves, including reliance on the third-party manufacturer for regulatory compliance. Our drug promotion and advertising is also subject to regulatory requirements and continuing FDA review.
Development of our drug candidates requires a significant investment in R&D. Our R&D expenses in turn, are subject to variation based on a number of factors, many of which are outside of our control. A sudden or significant increase in our R&D expenses could materially and adversely impact our results of operations.
Our R&D cost estimates and budgets are based on discussions with industry professionals and service providers. These may not take into account all of the activities involved for the development. Additionally, regulatory requirements may change from time to time and may dictate additional activities that lead to increased expenditures beyond budgeted.
Because we expect to expend substantial resources on R&D, our success depends in large part on the results as well as the costs of our R&D. A failure in our R&D efforts or substantial increase in our R&D expenses would adversely affect our results of operations. R&D expenditures are uncertain and subject to much fluctuation. Factors affecting our R&D expenses include, but are not limited to:
| ● | the number and outcome of clinical studies we are planning to conduct; for example, our R&D expenses may increase based on the number of late-stage clinical studies that we may be required to conduct; |
| ● | the number, extent, and outcome of pre-clinical studies we are planning to conduct; for example, our R&D expenses may increase based on the number and extent of IND-enabling pre-clinical studies including CMC Studies, Tox Package Studies, and Quality Programs that we may be required to conduct; |
| ● | the number of drugs entering into pre-clinical development from research; for example, there is no guarantee that internal research efforts will succeed in generating sufficient data for us to make a positive development decision; |
| ● | licensing activities, including the timing and amount of related development funding or milestone payments; for example, we may enter into agreements requiring us to pay a significant up-front fee for the purchase of in-process R&D that we may record as R&D expense; and |
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| ● | maintenance of our relationship with our licensing partner TheraCour and our rights and obligations under the license agreements, including any conflict, dispute or disagreement arising from our failure to satisfy payment obligations under such agreement, our ability to develop and commercialize the affected product candidate may be adversely affected. Any loss of our rights under our license agreements could delay or completely terminate our product development efforts for the affected product candidate. |
We will be unable to proceed with our business plan without obtaining additional financing to support our budgeted Clinical Development, Pre-Clinical Research and Development and other costs.
We believe we have sufficient funds on hand to complete the remaining tasks of the Phase I clinical trial and obtain a completed clinical study report, and to develop and file a Phase II clinical trial application to evaluate use of NV-387 for the treatment of RSV infection.
We have estimated a total cash expenditure budget of approximately $7.9 million for the period of July 2024 through October 2025 of which approximately $4.9 million is expected to be spent on research and development for our drug candidates, including completion and reporting of the Phase I clinical trial and preparation for the Phase II clinical trial of our lead drug candidate NV-387 for treatment of RSV, an IND filing for RSV indication, and approximately $3 million is budgeted for general and administrative expenses.
We are aware of numerous products under development or manufactured by competitors that are used for the prevention or treatment of certain diseases we have targeted for drug development. Various companies are developing biopharmaceutical products that potentially directly compete with our drug candidates even though their approach to such treatment is different.
We hope that our drug candidates under development and in clinical trials will address major markets within the anti-viral sector. Our competition will be determined in part by the potential indications for which drugs are developed and ultimately approved by regulatory authorities. Additionally, the timing of the market introduction of some of our potential drugs or of competitors’ products may be an important competitive factor. Accordingly, the relative speed with which we can develop drugs, complete pre-clinical testing, clinical trials, approval processes and supply commercial quantities to market are important competitive factors. We expect that competition among drugs approved for sale will be based on various factors, including product efficacy, safety, reliability, availability, price and patent protection.
The successful development of biopharmaceuticals is highly uncertain. A variety of factors including, pre-clinical study results or regulatory approvals, could cause us to abandon development of our drug candidates.
Successful development of biopharmaceuticals is highly uncertain and is dependent on numerous factors, many of which are beyond our control. Products that appear promising in the early phases of development may fail to reach the market for several reasons including:
| ● | pre-clinical study results that may show the product to be less effective than desired (e.g., a clinical trial fails to meet its primary objectives) or to have harmful or problematic side effects; |
| ● | failure to receive the necessary regulatory approvals or a delay in receiving such approvals. Among other things, such delays may be caused by slow enrollment in clinical studies, length of time to achieve study endpoints, additional time requirements for data analysis or an IND and later NDA, preparation, discussions with the FDA, an FDA request for additional pre-clinical or clinical data or unexpected safety or manufacturing issues; |
| ● | manufacturing costs, pricing or reimbursement issues, or other factors that make the product not economical; and |
| ● | the proprietary rights of others and their competing products and technologies that may prevent the product from being commercialized. |
Success in pre-clinical and early clinical studies does not ensure that large-scale clinical studies will be successful. Clinical results are frequently susceptible to varying interpretations that may delay, limit or prevent regulatory approvals. The length of time necessary to complete clinical studies and to submit an application for marketing approval for a final decision by a regulatory authority varies significantly from one product to the next, and may be difficult to predict.
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We have limited experience in conducting or supervising clinical trials and must outsource all clinical trials.
We have limited experience in conducting or supervising clinical trials that must be performed to obtain data to submit in concert with applications for approval by the FDA. The regulatory process to obtain approval for drugs for commercial sale involves numerous steps. Drugs are subjected to clinical trials that allow development of case studies to examine safety, efficacy, and other issues to ensure that sale of drugs meets the requirements set forth by various governmental agencies, including the FDA. In the event that our protocols do not meet standards set forth by the FDA, or that our data is not sufficient to allow such trials to validate our drugs in the face of such examination, we might not be able to meet the requirements that allow our drugs to be approved for sale.
Because we have limited experience in conducting or supervising clinical trials, we plan to continue to outsource our clinical trials to third parties. We have no control over their compliance with procedures and protocols used to complete clinical trials in accordance with standards required by the agencies that approve drugs for sale. If these subcontractors fail to meet these standards, the validation of our drugs would be adversely affected, causing a delay in our ability to meet revenue-generating operations.
We are subject to risks inherent in conducting clinical trials. The risk of non-compliance with FDA-approved good clinical practices by clinical investigators, clinical sites, or data management services could delay or prevent us from developing or ever commercializing our drug candidates.
Agreements with clinical investigators and medical institutions for clinical testing and with other third parties for data management services place substantial responsibilities on these parties, which could result in delays in, or termination of, our clinical trials if these parties fail to perform as expected. For example, if any of our clinical trial sites fail to comply with FDA-approved good clinical practices, we may be unable to use the data gathered at those sites. If these clinical investigators, medical institutions or other third parties do not carry out their contractual duties or obligations or fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to their failure to adhere to our clinical protocols or for other reasons, our clinical trials may be extended, delayed or terminated, and we may be unable to obtain regulatory approval for or successfully commercialize our drug candidates.
We or regulators may suspend or terminate our clinical trials for a number of reasons. We may voluntarily suspend or terminate our clinical trials if at any time we believe that they present an unacceptable risk to the patients enrolled in our clinical trials. In addition, regulatory agencies may order the temporary or permanent discontinuation of our clinical trials at any time if they believe that the clinical trials are not being conducted in accordance with applicable regulatory requirements or that they present an unacceptable safety risk to the patients enrolled in our clinical trials.
Our clinical trial operations will be subject to regulatory inspections at any time. If regulatory inspectors conclude that we or our clinical trial sites are not in compliance with applicable regulatory requirements for conducting clinical trials, we may receive reports of observations or warning letters detailing deficiencies, and we will be required to implement corrective actions. If regulatory agencies deem our responses to be inadequate, or are dissatisfied with the corrective actions that we or our clinical trial sites have implemented, our clinical trials may be temporarily or permanently discontinued, we may be fined, we or our investigators may be precluded from conducting any ongoing or any future clinical trials, the government may refuse to approve our marketing applications or allow us to manufacture or market our drug candidates or we may be criminally prosecuted. If we are unable to complete clinical trials and have our products approved due to our failure to comply with regulatory requirements, we will be unable to commence revenue-generating operations.
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Efforts of government and third-party payers to contain or reduce the costs of health care may adversely affect our revenues even if we were to develop an FDA approved drug.
Our ability to earn sufficient returns on our drug candidates may depend in part on the extent to which government health administration authorities, private health coverage insurers and other organizations will provide reimbursement for the costs of such drugs and related treatments. Significant uncertainty exists as to the reimbursement status of newly approved health care drugs, and we do not know whether adequate third-party coverage will be available for our drug candidates. If our current and proposed drugs are not considered cost-effective, reimbursement to the consumers may not be available or sufficient to allow us to sell drugs on a competitive basis. The failure of the government and third-party payers to provide adequate coverage and reimbursement rates for our drug candidates could adversely affect the market acceptance of our drug candidates, our competitive position and our financial performance
We will rely upon licensed patents to protect our technology. We may be unable to obtain or protect such intellectual property rights, and we may be liable for infringing upon the intellectual property rights of others.
Our ability to compete effectively will depend on our ability to maintain the proprietary nature of our technologies and the proprietary technology of others for which we have entered into licensing agreements. We have exclusive licenses from TheraCour to novel technologies, proprietary technologies, and knowhow, some of which has been filed in patent applications, and we expect to file patents of our own in the coming years. There can be no assurance that any of these patent applications will ultimately result in the issuance of a patent with respect to the technology owned by us or licensed to us. The patent position of pharmaceutical or biotechnology companies, including ours, is generally uncertain and involves complex legal and factual considerations. The standards that the United States Patent and Trademark Office use to grant patents are not always applied predictably or uniformly and can change. There is also no uniform, worldwide policy regarding the subject matter and scope of claims granted or allowable in pharmaceutical or biotechnology patents. Accordingly, we do not know the degree of future protection for our proprietary rights or the breadth of claims that will be allowed in any patents issued to us or to others. Further, we rely on a combination of trade secrets, know-how, technology and nondisclosure, and other contractual agreements and technical measures to protect our rights in the technology. If any trade secret, know-how or other technology not protected by a patent were to be disclosed to or independently developed by a competitor, our business and financial condition could be materially adversely affected.
We do not believe that any of the drug candidates we are currently developing infringe upon the rights of any third parties nor are they infringed upon by third parties; however, there can be no assurance that our technology will not be found in the future to infringe upon the rights of others or be infringed upon by others. In such a case, others may assert infringement claims against us, and should we be found to infringe upon their patents, or otherwise impermissibly utilize their intellectual property, we might be forced to pay damages, potentially including treble damages, if we are found to have willfully infringed on such parties’ patent rights. In addition to any damages we might have to pay, we may be required to obtain licenses from the holders of this intellectual property, enter into royalty agreements, or redesign our drug candidates so as not to utilize this intellectual property, each of which may prove to be uneconomical or otherwise impossible. Conversely, we may not always be able to successfully pursue our claims against others that infringe upon our technology and the technology exclusively licensed from the TheraCour Pharma. Thus, the proprietary nature of our technology or technology licensed by us may not provide adequate protection against competitors.
Moreover, the cost to us of any litigation or other proceeding relating to technology we license and other intellectual property rights, even if resolved in our favor, could be substantial, and the litigation would divert our management’s efforts. Uncertainties resulting from the initiation and continuation of any litigation could limit our ability to continue our operations.
Other companies or organizations may assert patent rights that prevent us from developing and commercializing our drug candidates.
We are in a relatively new scientific field that has generated many different patent applications from organizations and individuals seeking to obtain important patents in the field. Because the field is so new, very few of these patent applications have been fully processed by government patent offices around the world, and there is a great deal of uncertainty about which patents will issue, when, to whom, and with what claims. It is possible that there will be significant litigation and other proceedings, such as interference proceedings in various patent offices, relating to patent rights in the field. Others may attempt to invalidate TheraCour’s patents or other intellectual property rights. Even if our rights are not directly challenged, disputes among third parties could lead to the weakening or invalidation of those intellectual property rights.
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Thus, it is possible that one or more organizations will hold patent rights to which we will need a license. Any license required under any patent may not be made available on commercially acceptable terms, if at all. In addition, such licenses are likely to be non-exclusive and, therefore, our competitors may have access to the same technology licensed to us. If we fail to obtain a required license and are unable to design around a patent, we may be unable to effectively market some of our technology and drug candidates, which could limit our ability to generate revenues or achieve profitability and possibly prevent us from generating revenue sufficient to sustain our operations.
We are dependent upon TheraCour for the rights to develop the products we intend to sell and our license agreements with TheraCour require that TheraCour is the sole developer and supplier of our licensed products.
Our ability to develop, manufacture and sell the products the Company plans to develop is derived from our licensing agreements with TheraCour. The Agreements may be terminated by TheraCour as a result of: the insolvency or bankruptcy proceedings by or against the Company, a general assignment by the Company to its creditors, the dissolution of the Company, cessation by the Company of business operations for ninety (90) days or more or the commencement by the Company or an affiliate to challenge or invalidate the issued patents.
The Company does not hold the rights to any other patents nor does the Company conduct its own research and development to develop other products to manufacture and sell. In addition, TheraCour is the sole developer of our licensed products and we are required to pay TheraCour fees for indirect and direct costs incurred by TheraCour for its licensed products. Therefore, we are dependent upon TheraCour for all of our product development needs. If the Company’s Agreement with TheraCour is terminated, it is unlikely we will be able to commence revenue-generating operations or that the Company could continue operating at all.
The expiration or loss of patent protection may adversely affect our future revenues and operating earnings.
We rely on patent, trademark, trade secret and other intellectual property protection in the discovery, research and of our product candidates. In particular, patent protection is important in the development and eventual commercialization of our products and product candidates. Patents covering our products and product candidates normally provide market exclusivity, which is important in order for our products and product candidates to become profitable.
Certain of the patents, which comprise the intellectual property that we license, expire between 2026 and 2028. While we believe the patent holders may seek additional patent coverage that may protect the technology underlying these patents, there can be no assurances that such additional patent protection will be granted, or if granted, that these patents will not be infringed upon or otherwise held enforceable. Even if we are successful in obtaining a patent, patents have a limited lifespan and we currently do not have any products for sale. In the United States, the natural expiration of a utility patent typically is generally 20 years after it is filed. Various extensions may be available; however, the life of a patent, and the protection it affords, is limited. Without patent protection for our products and product candidates, we may be open to competition from generic versions of such methods and devices.
We lack suitable facilities for clinical testing; and rely on third parties.
The Company does not have facilities that could be used to conduct clinical testing. We expect to contract with third parties to conduct all clinical testing required to obtain approvals for any drugs that we might develop. We currently outsource all testing to a number of third parties in various collaborations and service contracts. Any of our collaborators or service providers may discontinue the service contract or collaboration. If this were to occur, then we would be required to modify our priorities and goals, obtain other collaborators or service providers to replace the ones we lose, or we may even be forced to abandon certain drug development programs. In addition, any failures by third parties to adequately perform their responsibilities may delay the submission of our proposed products for regulatory approval, impair our ability to deliver our products on a timely basis, increase our costs, or otherwise impair our competitive position.
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We have limited manufacturing experience.
We have not previously manufactured products in the highly regulated environment of pharmaceutical manufacturing. There are numerous regulations and requirements that must be maintained to obtain licensure and the permits required to commence manufacturing, as well as additional requirements to continue manufacturing pharmaceutical products. We own facilities that we use to manufacture clinical quantities of any products that might be developed by us. We believe that this cGMP-capable facility may allow us to produce limited quantities of a drug after approval for initial market entry, and that such an effort may make commercial sense if the treatment course requirements and afflicted patient populations are limited, and if the remuneration for the treatment course is appropriate. However, we do not own, nor lease facilities suitable for cGMP manufacture of any of our drug candidates in large commercial quantities, nor do we have the resources at this time to acquire or lease suitable facilities. At present, we have not retained any contract manufacturing organizations (CMO) for commercial manufacture or for clinical product manufacture.
We may be unable to attract, retain, and motivate skilled personnel which will delay our product development programs and our research and development efforts.
Our success depends on our continued ability to attract, retain, and motivate highly qualified scientific personnel who must undergo extensive training to assist in our research programs. Competition for skilled and qualified personnel and academic and other research collaborations is intense. If we lose the services of personnel with the necessary skills, or if there are extensive delays in training such personnel, it could significantly impede the achievement of our research and development objectives. We are currently experiencing extreme staffing constraints as well as financing constraints that have already caused substantial delays and may continue to cause further delays in our estimated timelines, unless we are successful at raising additional funds and at attracting and retaining highly skilled employees with specific skill-sets. There can be no assurance that we will be able to raise sufficient funding or that even if we are able to raise funding on terms favorable to the Company, that we will be able to hire and retain such qualified employees, The inability to hire and retain these employees will significantly delay our objectives including filing an IND with the FDA.
We have no sales and marketing personnel.
We are an early stage development company with limited resources. We do not currently have any products available for sale, and have not secured sales and marketing staff at this early stage of operations. We cannot generate sales without a sales or marketing staff and we cannot guarantee we will be successful in developing one. Even if we were to successfully develop approvable drugs, we will not be able to sell these drugs if we or our third-party manufacturers fail to comply with manufacturing regulations.
Since we cannot predict whether or when we will obtain regulatory approval to commercialize our product candidates, we cannot predict the timing of any future revenue from these product candidates.
We cannot commercialize any of our product candidates to generate revenue until the appropriate regulatory authorities have reviewed and approved the marketing applications for the product candidates. We cannot ensure that the regulatory agencies will complete their review processes in a timely manner or that we will obtain regulatory approval for any product candidate that we or our collaborators develop. Satisfaction of regulatory requirements typically takes many years, is dependent upon the type, complexity and novelty of the product and requires the expenditure of substantial resources. Regulatory approval processes outside the United States include all of the risks associated with the FDA approval process. In addition, we may experience delays or rejections based upon additional government regulation from future legislation or administrative action or changes in FDA policy during the period of product development, clinical trials and FDA regulatory review.
We license our core technology from TheraCour and we are dependent upon them as they have exclusive development rights. If we lose the right to utilize any of the proprietary information that is the subject of this license agreement, we may incur substantial delays and costs in development of our drug candidates
We have entered into Material License Agreements with TheraCour. TheraCour has exclusive rights to develop exclusively for us, the materials that comprise the core drugs of our planned business. TheraCour is a development stage company with limited financial resources and needs the Company’s progress payments to further the development of the nanoviricides. We control the research and work TheraCour performs on our behalf and no costs may be incurred without our prior authorization or approval.
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We depend on TheraCour and other third parties to perform manufacturing activities effectively and on a timely basis. If these third parties fail to perform as required, this could impair our ability to deliver our products on a timely basis or cause delays in our clinical trials and applications for regulatory approval, and these events could harm our competitive position and adversely affect our ability to commence revenue-generating operations. The manufacturing process for pharmaceutical products is highly regulated, and regulators may shut down manufacturing facilities that they believe do not comply with regulations. We, and our manufacturers are subject to the FDA’s current Good Manufacturing Practices, which are extensive regulations governing manufacturing processes, stability testing, record keeping and quality standards and similar regulations are in effect in other countries. In addition, our manufacturing operations are subject to routine inspections by regulatory agencies.
Our collaborative relationships with third parties could cause us to expend significant resources and incur substantial business risk with no assurance of financial return.
We anticipate substantial reliance upon strategic collaborations for marketing and the commercialization of our drug candidates and we may rely even more on strategic collaborations for R&D of our other drug candidates. Our business depends on our ability to sell drugs to both government agencies and to the general pharmaceutical market. Offering our drug candidates for non-medical applications to government agencies does not require us to develop new sales, marketing or distribution capabilities beyond those already existing in the company. Selling antiviral drugs, however, does require such development. We plan to sell antiviral drugs through strategic partnerships with pharmaceutical companies. If we are unable to establish or manage such strategic collaborations on terms favorable to us in the future, our revenue and drug development may be limited. To date, we have not entered into any strategic collaboration with third parties capable of providing these services. In addition, we have not yet marketed or sold any of our drug candidates or entered into successful collaborations for these services in order to ultimately commercialize our drug candidates.
If we determine to enter into R&D collaborations during the early phases of drug development, our success will in part depend on the performance of our research collaborators. We will not directly control the amount or timing of resources devoted by our research collaborators to activities related to our drug candidates. Our research collaborators may not commit sufficient resources to our programs. If any research collaborator fails to commit sufficient resources, our preclinical or clinical development programs related to such collaboration could be delayed or terminated. Also, our collaborators may pursue existing or other development-stage products or alternative technologies in preference to those being developed in collaboration with us. Finally, if we fail to make required milestone or royalty payments to our collaborators or to observe other obligations in our agreements with them, our collaborators may have the right to terminate those agreements.
Manufacturers producing our drug candidates must follow current GMP regulations enforced by the FDA and foreign equivalents. If a manufacturer of our drug candidates does not conform to the current GMP regulations and cannot be brought up to such a standard, we will be required to find alternative manufacturers that do conform. This may be a long and difficult process and may delay our ability to receive FDA or foreign regulatory approval of our drug candidates and cause us to fall behind on our business objectives.
Establishing strategic collaborations is difficult and time-consuming. Our discussion with potential collaborators may not lead to the establishment of collaborations on favorable terms, if at all. Potential collaborators may reject collaborations based upon their assessment of our financial, regulatory or intellectual property position. Even if we successfully establish new collaborations, these relationships may never result in the successful development or commercialization of our drug candidates or the generation of sales revenue. To the extent that we enter into collaborative arrangements, our drug revenues are likely to be lower than if we directly marketed and sold any drugs that we may develop.
Management of our relationships with our collaborators will require:
| ● | significant time and effort from our management team; |
| ● | coordination of our marketing and R&D programs with the marketing and R&D priorities of our collaborators; and |
| ● | effective allocation of our resources to multiple projects. |
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We employ the use of certain chemical and biological agents and compounds that may be deemed hazardous and we are therefore subject to various environmental laws and regulations. Compliance with these laws and regulations may result in significant costs, which could materially reduce our ability to become profitable.
We use hazardous materials, including chemicals and biological agents and compounds that could be dangerous to human health and safety or the environment. As appropriate, we safely store these materials and wastes resulting from their use at our laboratory facility pending their ultimate use or disposal. We contract with a third party to properly dispose of these materials and wastes. We are subject to a variety of federal, state and local laws and regulations governing the use, generation, manufacture, storage, handling and disposal of these materials and wastes. We may incur significant costs complying with environmental laws and regulations adopted in the future.
We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations. We may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts. Our failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.
If we use biological and hazardous materials in a manner that causes injury, we may be liable for damages.
Our R&D and manufacturing activities will involve the use of biological and hazardous materials. Although we believe our safety procedures for handling and disposing of these materials comply with federal, state and local laws and regulations, we cannot entirely eliminate the risk of accidental injury or contamination from the use, storage, handling or disposal of these materials. We carry $7,000,000 casualty and general liability insurance policies. Accordingly, in the event of contamination or injury, we could be held liable for damages or penalized with fines in an amount exceeding our resources and insurance coverage, and our clinical trials or regulatory approvals could be suspended.
We depend upon our senior management and their loss or unavailability could put us at a competitive disadvantage.
We currently depend upon the efforts and abilities of our management team. The loss or unavailability of the services of any of these individuals for any significant period of time could have a material adverse effect on our business, prospects, financial condition and results of operations. We have not obtained, do not own, nor are we the beneficiary of key-person life insurance for all of our key personnel.
The Company believes that Dr. Anil Diwan, our President and Executive Chairman is critical to the success of the Company. The Company is a limited beneficiary of a certain amount of key man insurance for Anil Diwan that the Company maintains. However, there can be no assurances that the amount of the key man insurance coverage would be sufficient to provide replacement of this key officer for continuing the Company’s operations in a timely manner, should such an event arise.
The Company also maintains a limited amount of Directors and Officers Liability insurance coverage to protect all of its directors and executive officers taken together. There can be no assurance that this D&O coverage will be sufficient to cover the costs of the events that may lead to its invocation, in which case, there could be a substantial impact on the Company’s ability to continue operations, should such an unforeseen event occur.
There are conflicts of interest among our officers, directors and stockholders.
Certain of our executive officers and directors and their affiliates are engaged in other activities and have interests in other entities on their own behalf or on behalf of other persons. Neither we, nor our stockholders will have any rights in these ventures or their income or profits. Specifically, Dr. Anil Diwan owns approximately 90% of the capital stock of TheraCour, which as of June 30, 2024, owned 3.6% of our common stock, and 681,859 shares of the Company’s Series A preferred stock, and provides the nanomaterials to the Company with which it intends to develop its products and is the holder of the intellectual property rights the Company uses to conduct its operations. While the Company is not aware of any conflict that has arisen to date, Dr. Diwan may have conflicting fiduciary duties between the Company and TheraCour, for which he must recuse himself from certain decision-making processes of the Company.
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The Company does not allow a conflicted shareholder, director, or executive officer to vote on matters wherein a conflict may be perceived. The conflicted person or entity is not allowed to nominate an alternate person to vote for them either. Other than this safeguard, the Company currently does not have any policy in place, should such a conflict arise.
In particular:
| ● | Our executive officers or directors or their affiliates may have an economic interest in, or other business relationship with, partner companies that invest in us. |
| ● | Our executive officers or directors or their affiliates have interests in entities that provide products or services to us. |
In any of these cases:
| ● | Our executive officers or directors may have a conflict between our current interests and their personal financial and other interests in another business venture. |
| ● | Our executive officers or directors may have conflicting fiduciary duties to us and the other entity. |
| ● | The terms of transactions with the other entity may not be subject to arm’s length negotiations and therefore may be on terms less favorable to us than those that could be procured through arm’s length negotiations. |
We anticipate entering into contracts with various U.S. government agencies. In contracting with government agencies, we will be subject to various federal contract requirements. Future sales to U.S. government agencies will depend, in part, on our ability to meet these requirements, certain of which we may not be able to satisfy.
We may enter into contracts with various U.S. government agencies which have special contracting requirements that give the government agency various rights or impose on the other party various obligations that can make the contracts less favorable to the non- government party. Consequently, if a large portion of our revenue is attributable to these contracts, our business may be adversely affected should the governmental parties exercise any of these additional rights or impose any of these additional obligations.
U.S. government contracts typically contain unfavorable termination provisions and are subject to audit and modification by the government at its sole discretion, which subjects us to additional risks. These risks include the ability of the U.S. government to unilaterally:
| ● | suspend or prevent us for a set period of time from receiving new contracts or extending existing contracts based on violations or suspected violations of laws or regulations; |
| ● | terminate our existing contracts; |
| ● | reduce the scope and value of our existing contracts; |
| ● | audit and object to our contract-related costs and fees, including allocated indirect costs; |
| ● | control and potentially prohibit the export of our drug candidates; and |
| ● | change certain terms and conditions in our contracts. |
The U.S. government may terminate any of its contracts with us either for its convenience or if we default by failing to perform in accordance with the contract schedule and terms. Termination for convenience provisions generally enable us to recover only our costs incurred or committed, and settlement expenses and profit on the work completed prior to termination. Termination for default provisions do not permit these recoveries and make us liable for excess costs incurred by the U.S. government in procuring undelivered items from another source.
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As a U.S. government contractor, we may become subject to periodic audits and reviews. Based on the results of these audits, the U.S. government may adjust our contract-related costs and fees, including allocated indirect costs. As part of any such audit or review, the U.S. government may review the adequacy of, and our compliance with, our internal control systems and policies, including those relating to our purchasing, property, compensation and/or management information systems. In addition, if an audit or review uncovers any improper or illegal activity, we may be subject to civil and criminal penalties and administrative sanctions, including termination of our contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S. government. We could also suffer serious harm to our reputation if allegations of impropriety were made against us. In addition, under U.S. government purchasing regulations, some of our costs, including most financing costs, amortization of intangible assets, portions of our R&D costs and some marketing expenses, may not be reimbursable or allowed under our contracts. Further, as a U.S. government contractor, we may become subject to an increased risk of investigations, criminal prosecution, civil fraud, whistleblower lawsuits and other legal actions and liabilities to which purely private sector companies are not.
We may fail to obtain contracts to supply the U.S. government, and we may be unable to commercialize our drug candidates.
The U.S. government has undertaken commitments to help secure improved countermeasures against bio-terrorism. The process of obtaining government contracts is lengthy and uncertain, and we would compete for each contract. Moreover, the award of one government contract would not necessarily secure the award of future contracts covering the same drug. If the U.S. government makes significant future contract awards for the supply of its emergency stockpile to our competitors, our business will be harmed and it is unlikely that we will be able to ultimately commercialize our competitive drug candidate.
In addition, the determination of when and whether a drug is ready for large scale purchase and potential use will be made by the government through consultation with a number of government agencies, including the FDA, the NIH, the CDC and the Department of Homeland Security. Congress has approved measures to accelerate the development of bio-defense drugs through NIH funding, the review process by the FDA and the final government procurement contracting authority. While this may help speed the approval of our drug candidates, it may also encourage competitors to develop their own drug candidates.
We cannot predict with certainty the size of the market, if any for all of the antiviral drugs that the governments may want to stockpile. Consequently, we cannot predict whether sales, if any, to governments will be sufficient to fund our business plan and commence revenue-generating operations.
If the U.S. government fails to continue funding bio-defense drug candidate development efforts or fails to purchase sufficient quantities of any future bio-defense drug candidate, we may be unable to generate sufficient revenues to continue operations.
While we have not yet received U.S. government funding, we hope to receive funding from the U.S. government for the development of our bio-defense drug candidates. Changes in government budgets and agendas, however, may result in future funding being decreased and de-prioritized, and government contracts typically contain provisions that permit cancellation in the event that funds are unavailable to the government agency. Furthermore, we cannot be certain of the timing of any future funding, and substantial delays or cancellations of funding could result from protests or challenges from third parties. If the U.S. government fails to continue to adequately fund R&D programs, we may be unable to generate sufficient revenues to continue operations. Similarly, if we develop a drug candidate that is approved by the FDA, but the U.S. government does not place sufficient orders for this drug, our future business may be harmed.
Risks Related to the Biotechnology/Biopharmaceutical Industry
The biotechnology and biopharmaceutical industries are characterized by rapid technological developments and a high degree of competition. We may be unable to compete with enterprises equipped with more substantial resources than us.
The biotechnology and biopharmaceutical industries are characterized by rapid technological developments and a high degree of competition based primarily on scientific and technological factors. These factors include the availability of patent and other protection for technology and products, the ability to commercialize technological developments and the ability to obtain government approval for testing, manufacturing and marketing.
Our Coronavirus drug candidates would compete with the already approved therapies (either EUA or full approvals) and are subject to the COVID pandemic dissipating.
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Our RSV drug does not have any direct competition at present but there are two protective antibodies as well as three vaccines for RSV, although there are no approved treatments other than the highly toxic last-resort drug, ribavirin.
Our shingles drug candidate would compete with Valtrex®, an approved drug (valacyclovir), and other acyclovir-related nucleoside analogs, and new drugs in the pipeline. FV-100, a VZV-specific nucleoside analog was in Phase III clinical trials that were terminated. Development of ASP2151, a helicase/primase inhibitor, was terminated due to adverse events in healthy persons in clinical trials. We are not aware of any further drugs in clinical trials for the treatment of shingles. Painkillers such as lidocaine formulations and oxycodone formulations were in clinical trials for symptomatic relief of PHN.
Our HSV-1 and HSV-2 skin cream drug candidates would compete with branded and unbranded available skin creams, such as Abreva™, as well as with branded and unbranded oral drug candidates against herpes, such as those based on acyclovir, valacyclovir, gancyclovir, among others. It is not known until after human clinical trials whether our drug candidates provide patient benefits beyond those of these drugs. Other drugs against herpes that are in the pipeline, if approved prior to our drug approval, would also be competition. Several drugs are in clinical trials for HSV-1 and/or HSV-2 treatment. These include brincidofovir, cyclopropavir, valamocyclovir, pritelivir, letermovir, as well as antibodies. Their patient benefit profiles are not known at present.
Our anti-influenza drug in development, Flucide, would compete with neuraminidase inhibitors Tamiflu and Relenza, anti-influenza drugs that are sold by Roche and Glaxo SmithKline (GSK), respectively. Generic competitors include amantadine and rimantadine, both oral. BioCryst Pharmaceuticals, Inc. has achieved FDA approval for IV Infusions formulations of peramivir, an influenza neuraminidase inhibitor, for the treatment of uncomplicated influenza. Peramivir is approved in Japan and had obtained emergency use authorization in the US. Its effectiveness during multiple clinical trials was found to be severely limited. Recently, a new drug, Xofluza (Baloxavir marboxil), developed by Shionogi, Inc., and licensed by Roche, has been approved in Japan, USA, and most of the world. It is an influenza viral endonuclease PA inhibitor. Other drugs in this class are in clinical trials. So are drugs targeting the m7G cap-snatching activity (PB2) of influenza virus such as VX787, and antibodies. Several H5N1 bird flu, and influenza novel H1N1/2009 vaccines are also in development worldwide. Several companies are developing anti-influenza drugs and vaccines.
We compete with specialized biopharmaceutical firms in the United States, Europe and elsewhere, as well as a growing number of large pharmaceutical companies that are applying biotechnology to their operations, many of which have greater market presence and resources than we do. Many biopharmaceutical companies have focused their development efforts in the human therapeutics area, including cancer. Many major pharmaceutical companies have developed or acquired internal biotechnology capabilities or made commercial arrangements with other biopharmaceutical companies. These companies, as well as academic institutions, government agencies and private research organizations, also compete with us in recruiting and retaining highly qualified scientific personnel and consultants. Our ability to compete successfully with other companies in the pharmaceutical field will also depend to a considerable degree on the continuing availability of capital to us.
We are aware of numerous products under development or manufactured by competitors that are used for the prevention or treatment of certain diseases we have targeted for drug development. Various companies are developing biopharmaceutical products that potentially directly compete with our drug candidates even though their approach to such treatment is different.
We hope that our drug candidates under development and in clinical trials will address major markets within the anti-viral sector. Our competition will be determined in part by the potential indications for which drugs are developed and ultimately approved by regulatory authorities. Additionally, the timing of the market introduction of some of our potential drugs or of competitors’ products may be an important competitive factor. Accordingly, the relative speed with which we can develop drugs, complete pre-clinical testing, clinical trials, approval processes and supply commercial quantities to market are important competitive factors. We expect that competition among drugs approved for sale will be based on various factors, including product efficacy, safety, reliability, availability, price and patent protection.
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The successful development of biopharmaceuticals is highly uncertain. A variety of factors including, pre-clinical study results or regulatory approvals, could cause us to abandon development of our drug candidates.
Successful development of biopharmaceuticals is highly uncertain and is dependent on numerous factors, many of which are beyond our control. Products that appear promising in the early phases of development may fail to reach the market for several reasons including:
| ● | pre-clinical study results that may show the product to be less effective than desired (e.g., the study failed to meet its primary objectives) or to have harmful or problematic side effects; |
| ● | failure to receive the necessary regulatory approvals or a delay in receiving such approvals. Among other things, such delays may be caused by slow enrollment in clinical studies, length of time to achieve study endpoints, additional time requirements for data analysis or a IND and later NDA, preparation, discussions with the FDA, an FDA request for additional pre-clinical or clinical data or unexpected safety or manufacturing issues; |
| ● | manufacturing costs, pricing or reimbursement issues, or other factors that make the product not economical; and |
| ● | the proprietary rights of others and their competing products and technologies that may prevent the product from being commercialized. |
Success in pre-clinical and early clinical studies does not ensure that large-scale clinical studies will be successful. Clinical results are frequently susceptible to varying interpretations that may delay, limit or prevent regulatory approvals. The length of time necessary to complete clinical studies and to submit an application for marketing approval for a final decision by a regulatory authority varies significantly from one product to the next, and may be difficult to predict.
Risks Related to the Securities Markets and Investments in Our Common Stock
General securities market uncertainties resulting from international turmoil.
International securities markets have become highly unstable in the aftermath of extensive spending by the governments to combat COVID-19, the rise in energy prices resulting from the Russian war in Ukraine, the political, social and economic effects of this war, changes in governments leading to changes in monetary and fiscal policies, inflation, and other external factors. As a result, the markets may not be available to us for purposes of raising required capital at the time we need it. Should we not be able to obtain financing when required, in the amounts necessary to execute on our plans in full, or on terms which are economically feasible we may be unable to sustain the level of spending required to pursue our strategic plan and may have to reduce the planned future growth and scope of our operations.
If we do not meet the continued listing standards of the NYSE American our common stock could be delisted from trading, which could limit investors’ ability to make transactions in our common stock and subject us to additional trading restrictions.
Our common stock is listed on the NYSE American, a national securities exchange, which imposes continued listing requirements with respect to listed shares. If, however, we fail to satisfy the continued listing standards, such as, for example, the requirement that our shares not trade “for a substantial period of time at a low price per share,” fail to meet stockholders equity requirements, or that we not dispose of our principal operating assets or discontinue a substantial portion of our operations, among other requirements, the NYSE American may issue a non-compliance letter or initiate delisting proceedings. If our securities are delisted from trading on the NYSE American and we are not able to list our securities on another exchange or to have them quoted on NASDAQ, our securities could be quoted on the OTC Bulletin Board or on the “pink sheets.” As a result, we could face significant adverse consequences including:
| ● | a limited availability of market quotations for our securities; |
| ● | a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
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| ● | a limited amount of news and analyst coverage for us; and |
| ● | a decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3 or obtain additional financing in the future). |
Our Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which will require us to incur audit fees and legal fees in connection with the preparation of such reports. These additional costs will reduce or might eliminate our ability to reach profitability.
Our Company is required to file periodic reports with the Commission pursuant to the Exchange Act and the rules and regulations promulgated thereunder. To comply with these requirements, our independent registered auditors will have to review our quarterly financial statements and audit our annual financial statements. Moreover, our legal counsel will have to review and assist in the preparation of such reports. The costs charged by these professionals for such services cannot be accurately predicted at this time, because factors such as the number and type of transactions that we engage in and the complexity of our reports cannot be determined at this time and will have a major effect on the amount of time to be spent by our auditors and attorneys. However, the incurrence of such costs will obviously be an expense to our operations and thus have a negative effect on our ability to meet our overhead requirements and earn a profit. We may be exposed to potential risks under Section 404 of the Sarbanes-Oxley Act of 2002. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, the trading price of our common stock, if a market ever develops, could drop significantly, or we could become subject to Commission enforcement proceedings.
Our Common Stock may be considered a “penny stock” and may be difficult to sell.
The Commission has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to specific exemptions. Historically, the price of our common stock has fluctuated greatly. If, the market price of the common stock is less than $5.00 per share and the common stock does not fall within any exemption, it therefore may be designated as a “penny stock” according to Commission rules. The “penny stock” rules impose additional sales practice requirements on broker-dealers who sell securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of securities and have received the purchaser’s written consent to the transaction before the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the broker-dealer must deliver, before the transaction, a disclosure schedule prescribed by the Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny stocks. These additional burdens imposed on broker-dealers may restrict the ability or decrease the willingness of broker-dealers to sell our common shares, and may result in decreased liquidity for our common shares and increased transaction costs for sales and purchases of our common shares as compared to other securities.
Our stock price may be volatile and your investment in our common stock could suffer a decline in value.
The price of our Common Stock, as quoted on the NYSE American, may fluctuate significantly in response to a number of factors, many of which are beyond our control. These factors include but are not limited to:
| ● | progress of our products through the regulatory process |
| ● | results of preclinical studies and clinical trials; |
| ● | announcements of technological innovations or new products by us or our competitors; |
| ● | government regulatory action affecting our products or our competitors’ products in both the United States and foreign countries; |
| ● | developments or disputes concerning patent or proprietary rights; |
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| ● | general market conditions for emerging growth and pharmaceutical companies; |
| ● | economic conditions in the United States or abroad; |
| ● | actual or anticipated fluctuations in our operating results; |
| ● | broad market fluctuations; and |
| ● | changes in financial estimates by securities analysts. |
There is a risk of market fraud.
Shareholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. We are aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.
A registration of a significant amount of our outstanding restricted stock may have a negative effect on the trading price of our stock.
At June 30, 2024, shareholders of the Company held 1,330,156 shares of restricted common stock, or approximately 10.1% of the outstanding Common Stock. If we were to file a registration statement including all of these shares, and the registration is allowed by the SEC, these shares would be freely tradable upon the effectiveness of the planned registration statement. If investors holding a significant number of freely tradable shares decide to sell them in a short period of time following the effectiveness of a registration statement, such sales could contribute to significant downward pressure on the price of our stock.
We do not intend to pay any cash dividends in the foreseeable future and, therefore, any return on your investment in our capital stock must come from increases in the fair market value and trading price of the capital stock.
We have not paid any cash dividends on our common stock and do not intend to pay cash dividends on our common stock in the foreseeable future. We intend to retain future earnings, if any, for reinvestment in the development and expansion of our business. Any credit agreements, which we may enter into with institutional lenders, may restrict our ability to pay dividends. Whether we pay cash dividends in the future will be at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital requirements and any other factors that the board of directors decides is relevant. Therefore, any return on your investment in our capital stock must come from increases in the fair market value and trading price of the capital stock.
We may issue additional equity shares to fund the Company’s operational requirements, which would dilute share ownership.
The Company’s continued viability depends on its ability to raise capital. Changes in economic, regulatory or competitive conditions may lead to cost increases. Management may also determine that it is in the best interest of the Company to develop new services or products. In any such case additional financing is required for the Company to meet its operational requirements. The sale or the proposed sale of substantial amounts of our common stock in the public markets may adversely affect the market price of our common stock and our stock price may decline substantially.
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The Company is authorized to issue up to 150,000,000 shares of common stock without additional approval by shareholders. As of June 30, 2024, we had 13,144,055 shares of common stock outstanding, 6,862 warrants convertible to 6,862 shares of common stock, and 892,625 shares of Series A preferred stock convertible into 3,124,188 shares of common stock only in the event of a change in control.
Large amounts of our common stock will be eligible for resale under Rule 144.
As of June 30, 2024, 1,330,156 of 13,144,055 issued and outstanding shares of the Company’s common stock were restricted securities as defined under Rule 144 of the Securities Act of 1933, as amended (the “Act”) and under certain circumstances may be resold without registration pursuant to Rule 144. In addition 892,625 shares of Series A preferred stock are restricted and convertible into 3,124,188 shares of common stock only upon of a change of control of the Company.
Approximately 668,384 shares of our restricted shares of common stock are held by non-affiliates who may avail themselves of the public information requirements and sell their shares in accordance with Rule 144. As a result, some or all of these shares may be sold in accordance with Rule 144 potentially causing the price of the Company’s shares to decline.
In general, under Rule 144, a person (or persons whose shares are aggregated) who has satisfied a six month holding period may, under certain circumstances, sell within any three-month period a number of securities which does not exceed the greater of 1% of the then outstanding shares of common stock or the average weekly trading volume of the class during the four calendar weeks prior to such sale. Rule 144 also permits, under certain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate, as such term is defined in Rule 144(a)(1), of the Company and who has satisfied a one-year holding period. Any substantial sale of the Company’s common stock pursuant to Rule 144 may have an adverse effect on the market price of the Company’s shares. This filing will satisfy certain public information requirements necessary for such shares to be sold under Rule 144.
The requirements of complying with the Sarbanes-Oxley act may strain our resources and distract management.
We are subject to the reporting requirements of the Exchange Act, and the Sarbanes-Oxley Act of 2002. The costs associated with these requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. Historically, we have maintained a small accounting staff, but in order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, significant additional resources and management oversight will be required. This effort may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, we may need to hire additional accounting and financial persons with appropriate public company experience and technical accounting knowledge, and we cannot assure you that we will be able to do so in a timely fashion.
Sales of additional equity securities may adversely affect the market price of our common stock and your rights in the Company may be reduced.
We expect to continue to incur drug development and selling, general and administrative costs, and in order to satisfy our funding requirements, we may need to sell additional equity securities. Our stockholders may experience substantial dilution and a reduction in the price that they are able to obtain upon sale of their shares. Also, any new securities issued may have greater rights, preferences or privileges than our existing common stock that may adversely affect the market price of our common stock and our stock price may decline substantially.
ITEM 1B: UNRESOLVED STAFF COMMENTS.
None.
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ITEM 1C: CYBERSECURITY
Cybersecurity Risk Management and Strategy
We are a clinical stage biotechnology company focused on developing and commercializing new treatments for viral diseases. We and our third-party service providers, collect, process, transmit, and store sensitive data on our systems, including intellectual property, proprietary or confidential business information, and a variety of personal data.
We rely on third parties, including cloud vendors, for various business functions. We select key third-party service providers based on several factors, including the type of data processed and the nature of services offered, and we oversee such key third-party service providers by conducting vendor diligence upon onboarding and ongoing monitoring, including a review of SOC-1 reports on an annual basis, where applicable.
We have adopted processes designed to identify, assess and manage material risks from cybersecurity threats. Those processes include response to and an assessment of internal and external threats to the security, confidentiality, integrity and availability of our data and information systems, along with other material risks to our operations. In addition, we have implemented procedures over certain areas such as access on/offboarding and account management to help govern the processes put in place by management designed to protect our IT assets, data, and services from threats and vulnerabilities.
Governance
Management is responsible for the day-to-day management of the risks we face, while our board of directors has responsibility for the oversight of risk management, including risks from cybersecurity threats. The audit committee has primary responsibility for oversight of cybersecurity and is briefed on cybersecurity risks at least once a year and following any material cybersecurity incidents. Our board of directors receives periodic updates from our audit committee regarding matters of cybersecurity. Our board members also engage in ad hoc conversations with management on cybersecurity-related news events and discuss any significant updates to our cybersecurity risk management and initiatives.
As of the date of this Annual Report on Form 10-K, we have not experienced a cybersecurity incident that resulted in a material effect on our business strategy, results of operations, or financial condition.
ITEM 2: PROPERTIES
Description of Property
The Company’s principal executive offices are located at 1 Controls Drive, Shelton, CT, and include approximately 18,000 square feet of office, laboratory, and cGMP-capable drug manufacturing space. These facilities are fully owned by the Company with no outstanding debt or mortgage.
ITEM 3: LEGAL PROCEEDINGS.
From time to time, we are a party to legal proceedings arising in the ordinary course of business. We are not currently a party to any legal proceedings that we believe could have a material adverse effect on financial condition or results of operations.
ITEM 4: MINE SAFETY DISCLOSURES.
Not applicable.
PART II
ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Our Common Stock is listed on the NYSE-American under the symbol “NNVC”.
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Number of Shareholders.
As of June 30, 2024, a total of 13,144,055 shares of the Company’s common stock are outstanding and held by 146 shareholders of record. This number of shareholders does not reflect the persons or entities that hold their stock in nominee or street name through various brokerage firms. Of this amount, 11,813,899 shares are unrestricted, of which 0 shares are held by affiliates, 668,384 shares are restricted securities held by non-affiliates, and the remaining 661,772 shares are restricted securities held by affiliates. These shares may only be sold in accordance with Rule 144.
Dividends.
The Company has not paid any cash dividends since its inception. The Company currently intends to retain any earnings for use in its business, and therefore does not anticipate paying dividends in the foreseeable future.
ITEM 6: [RESERVED]
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ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the information contained in the financial statements of the Company and the notes thereto appearing elsewhere herein and in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2024. Readers should carefully review the risk factors disclosed in this Form 10-K and other documents filed by the Company with the SEC.
As used in this report, the terms “Company”, “we”, “our”, “us” and “NNVC” refer to NanoViricides, Inc., a Delaware corporation.
PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report contains forward-looking statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,” “NNVC believes,” “management believes” and similar language. The forward-looking statements are based on the current expectations of NNVC and are subject to certain risks, uncertainties and assumptions, including those set forth in the discussion under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report. Actual results may differ materially from results anticipated in these forward-looking statements. We base the forward-looking statements on information currently available to us, and we assume no obligation to update them.
Investors are also advised to refer to the information in our previous filings with the Securities and Exchange Commission (SEC), especially on Forms 10-K, 10-Q and 8-K, in which we discuss in more detail various important factors that could cause actual results to differ from expected or historic results. It is not possible to foresee or identify all such factors. As such, investors should not consider any list of such factors to be an exhaustive statement of all risks and uncertainties or potentially inaccurate assumptions.
Management’s Plan of Operation
The Company’s drug development business model was formed in May 2005 with a license to the patents and intellectual property held by TheraCour that enabled creation of drugs engineered specifically to combat viral diseases in humans. This exclusive license from TheraCour serves as a foundation for our intellectual property. The Company was granted a worldwide exclusive license to this technology for several drugs with specific targeting mechanisms for the treatment of the following human viral diseases: Human Immunodeficiency Virus (HIV/AIDS), Hepatitis B Virus (HBV), Hepatitis C Virus (HCV), Rabies, Herpes Simplex Virus (HSV-1 and HSV-2), Influenza and Asian Bird Flu Virus. The Company entered into an additional license agreement with TheraCour granting the Company the exclusive licenses for technologies developed by TheraCour for the additional virus types: Dengue viruses, Japanese Encephalitis virus, West Nile Virus, Viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes, and Ebola/Marburg viruses. The Company completed a license agreement for the field of VZV indications in November 2019 from TheraCour. The Company completed a license agreement for the field of human Coronavirus indications in September 2021 from TheraCour. TheraCour has not denied any licenses sought by the Company in the past.
The Company may seek to add additional virus types to its drug pipeline as the Company progresses further. The Company would then need to negotiate with TheraCour or an unrelated party appropriate license agreements to include those of such additional viruses that the Company determines it wants to follow for further development. Historically, the Company initiates negotiations for additional licenses when initial exploratory research determines that a viable drug candidate for the targeted field is possible. We are seeking to add to our existing portfolio of products through our internal discovery pre-clinical development programs and through an in-licensing strategy.
The licenses granted by TheraCour are for entire set of pathologies that the licensed virus is a causative agent for. The licenses are not for single drug/indication pairs, which is the customary mode of licensing in the pharmaceutical industry. Thus, these are very broad licenses and enable NanoViricides to pursue a number of indications as well as develop drug candidates with different characteristics as is best suited for the indications, without having to license the resulting drugs for each indication separately, as with normal pharmaceutical industry licensing.
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The Company plans to develop several drugs through the preclinical studies and clinical trial phases with the goal of eventually obtaining approval from the United States Food and Drug Administration (“FDA”) for these drugs. The Company plans, when appropriate, to seek regulatory approvals in several international markets, including developed markets such as Europe, Japan, Canada, Australia, and Emerging Regions such as Southeast Asia, India, China, Central and South America, as well as the African subcontinent. Seeking these regulatory approvals would only occur when and if one or more of our drugs have significantly advanced through the FDA and international regulatory process. If and as these advances occur, the Company may attempt to partner with more established pharmaceutical companies to advance the various drugs through the approval process.
The Company intends to perform the regulatory filings for the drugs it is currently developing. The Company will develop these drugs in part via subcontracts to TheraCour, the exclusive source for these nanomaterials. The Company may manufacture these drugs itself, or under subcontract arrangements with external manufacturers that carry the appropriate regulatory licenses and have appropriate capabilities. The Company intends to distribute these drugs via subcontracts with distributor companies or in partnership arrangements. The Company plans to market these drugs either on its own or in conjunction with marketing partners. The Company also plans to actively pursue co-development, as well as other licensing agreements with other pharmaceutical companies. Such agreements may entail up-front payments, milestone payments, royalties, and/or cost sharing, profit sharing and many other instruments that may bring early revenues to the Company. Such licensing and/or co-development agreements may shape the manufacturing and development options that the Company may pursue.
Although we have been able to develop nanoviricide drug candidates for multiple indications that are safe and effective in pre-clinical studies there can be no assurance that we will have sufficient resources to be able to successfully obtain regulatory approvals, manufacture, and market these products to commence revenue-generating operations.
There can be no assurance that other developments in the field would not impact our business plan adversely. For example, successful creation and availability of an effective vaccine may reduce the potential market size for a particular viral disease, or an effective drug may be developed by competitors that becomes difficult to compete against with our limited resources. Our goal, which we can give no assurance that we will achieve, is for NanoViricides, Inc. to become the premier company developing highly safe and effective drugs that employ an integrated multiplicity of actions as enabled by our nanomedicine approach for anti-viral therapy.
In summary, we are developing and sourcing compounds and preparing nano-materials; performing experiments involving preclinical studies using cell cultures and animal models of efficacy and safety, advancing drug candidates against different indications into IND-enabling safety/toxicology studies, and we have advanced our first drug candidate for treatment of COVID into Phase Ia/Ib clinical studies. We have generated funding through the issuances of debt and the sales of securities under our shelf registration and the private placement of common stock. We have not generated any revenues and we do not expect to generate revenues in the near future. We may not be successful in developing our drugs and start selling our products when planned, or we may not become profitable in the future. We have incurred net losses in each fiscal period since inception of our operations.
Results of Operations
The Company is a biopharmaceutical company and does not have any revenue for the years ended June 30, 2024 and June 30, 2023.
Comparison of the Year End June 30, 2024 to the Year Ended June 30, 2023
Revenues - The Company is a non-revenue producing entity.
Research and Development Expenses - Research and development expenses for the year ended June 30, 2024 decreased approximately $955,000, to approximately $5,437,000 from approximately $6,392,000 for the year ended June 30, 2023. This year-to-year decrease is generally attributable to the decrease in license fees, offset by the increase in outside laboratory services.
General and Administration Expenses - General and administrative expenses increased approximately $528,000 to approximately $3,079,000 for the year ended June 30, 2024 from approximately $2,551,000 for the year ended June 30, 2023. The increase in general and administrative expenses is generally attributable to an increase in professional services including, legal, accounting and investor outreach expenditures.
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Interest Income - Interest income was approximately $272,000 and approximately $356,000 for the years ended June 30, 2024 and 2023, respectively. Interest income decreased due to lower cash balances.
Interest Expense- The Company has incurred interest expense of approximately $50,000 and $900 for the years ended June 30, 2024 and June 30, 2023 respectively. The increase in interest expense for the year ended June 30, 2024 is a result of interest expense charged pursuant to the milestone payment note with TheraCour. The interest charged pursuant to the milestone payment note was cancelled by TheraCour on October 27, 2023. The cancellation of the note interest reduced accrued expenses and increased additional paid in capital by approximately $50,000.
Income Taxes - There is no provision for income taxes due to ongoing operating losses. As of June 30, 2024, we had estimated cumulative tax benefits and development tax credits and other deferred tax credits resulting in a deferred tax asset of approximately $39,772,000. This amount has been offset by a full valuation allowance.
Net Loss - For the year ended June 30, 2024, the Company had a net loss of approximately $8,294,000, or a basic and fully diluted loss per share of $0.70 compared to a net loss of approximately $8,589,000, or a basic and fully diluted loss per share of $0.74 for the year ended June 30, 2023. The decrease in the Company’s net loss for the year ended June 30, 2024 from the year ended June 30, 2023 of $295,000 is generally attributable to the items discussed above.
Research and Development Costs
The Company does not maintain separate accounting line items for each project in development. The Company maintains aggregate expense records for all research and development conducted. Because at this time all of the Company’s projects share a common core material, the Company allocates expenses across all projects at each period-end for purposes of providing accounting basis for each project. Project costs are allocated based upon labor hours performed for each project.
The Company has signed several cooperative research and development agreements with TheraCour, and expects to enter into additional cooperative agreements with other governmental and non-governmental, academic, or commercial, agencies, institutions, and companies. There can be no assurance that a final agreement may be achieved and that the Company will execute any of these agreements. However, should any of these agreements materialize, the Company will implement a system to track these costs by project and account for these projects as customer-sponsored activities and show these project costs separately.
The following table summarizes the primary components of our research and development expenses as allocated, during the periods presented in this Annual Report on Form 10-K.
Table : R&D Costs Allocation
Year Ended | |||||||
Program |
| June 30, 2024 |
| June 30, 2023 | |||
1 | Pan-Coronavirus Drug Program (Including COVID) – NV-387 | $ | 4,937,297 | $ | 6,092,414 | ||
2 | RSV | 250,000 | 200,000 | ||||
3 | HerpeCide™ Program. Herpes Simplex virus infections (HSV-1, HSV-2) and VZV Indications: Cold Sores, Genital Ulcers, Shingles and ARN | — | 100,000 | ||||
4 | Smallpox/Mpox | 150,000 | — | ||||
5 | Influenza | 100,000 | — | ||||
Total | $ | 5,437,297 | $ | 6,392,414 | |||
As many of our programs share a substantial amount of materials as well as laboratory work, we do not maintain project-based accounting of costs at present. The table above represents estimated cost allocations for specific activities in the different programs, with the bulk of common activities reported under the “Pan-coronavirus drug program – NV-387” heading.
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Financings
On May 5, 2023, we filed a registration statement on Form S-3 (File No. 333-271706) with the Securities and Exchange Commission (the “SEC”), as amended on May 8, 2023, which registration statement was declared effective by the SEC on May 22, 2023. Under this shelf registration process, we may, from time to time, sell up to $150 million in the aggregate of shares of common stock, shares of preferred stock, debt securities, warrants and units. Approximately $145 million remains available for sale as of the date of this filing.
On or about August 1, 2023, the ATM Sales Agreement that we previously had with EF Hutton, division of Benchmark Investments, LLC and B. Riley Securities, Inc., taken together as the Sales Agent, was amended to name EF Hutton as the only sales agent (the “Agent”) and to remove B. Riley as a sales agent. On August 4, 2023, we filed a prospectus supplement relating to the issuance and sale of our common stock, par value $0.00001 per share, having an aggregate offering price of up to $5,713,022, from time to time through or to our sole sales agent, EF Hutton. These sales, if any, would have been made pursuant to the terms of the August 1, 2023 ATM Sales Agreement.
On April 5, 2024, the Company entered into a new ATM sales agreement with. E.F. Hutton Securities (now EF Hutton, LLC), the sales agent, replacing the prior August 1, 2023 sales agreement, pursuant to which the Company may offer and sell, from time to time, through or to the Sales Agents, shares of common stock having an aggregate offering price of up to $50 million (each such offering an “At-the-Market” or ATM Offering). As of June 30, 2024, the Company sold 1,308,651 shares of common stock at an average price of approximately $2.47 per share. The shares were issued pursuant to a prospectus supplement dated May 5, 2023 and filed with the Securities and Exchange Commission on May 5, 2023 in connection with the Company’s shelf registration statement on Form S-3, as amended (File No. 333-271706), which became effective on May 22, 2023. The net proceeds to the Company from the offering was approximately $3,120,000 after placement agent fees and other estimated offering expenses.
From July 1, 2024 through September 10, 2024, subsequent to the Company’s fiscal year end, the Company sold 772,836 shares of common stock at an average price of approximately $1.98 per share. The net proceeds to the Company from the offering was approximately $1,533,000 after placement agent fees and other estimated offering expenses.
Liquidity and Capital Reserves
As of June 30, 2024, we had approximately $4,798,000 in cash and cash equivalents. Our liabilities as of June 30, 2024 are approximately $1,359,000, including accounts payable of approximately $376,000 payable to third parties, accounts payable to TheraCour of approximately $720,000, accrued expenses approximately $262,000.
The Company has an accumulated deficit at June 30, 2024 of approximately $139,375,000 and net cash used in operating activities of approximately $6,316,000 for the fiscal year then ended. In addition, the Company has not generated any revenues and no revenues are anticipated in the foreseeable future. Since May 2005, the Company has been engaged exclusively in research and development activities focused on developing targeted antiviral drugs. The Company has not yet commenced any product commercialization. Such losses are expected to continue for the foreseeable future and until such time, if ever, as the Company is able to attain sales levels sufficient to support its operations.
Management believes that the Company’s cash and cash equivalents balance of approximately $4.8 million and additional capital raised of approximately $1.5 million by ATM sales of our common stock from July 1, 2024 through September 10, 2024 and the Company’s existing resources, including availability under its $3 million line of credit will not be sufficient to fund the Company’s planned operations and expenditures for at least 12 months from the date of the filing of this Form 10-K. As a result substantial doubt exists about the Company’s ability to continue as a going concern.
Management is actively exploring additional required funding through non-dilutive grants and contracts, partnering, debt or equity financing pursuant to its plan. There is no assurance that we will be successful in obtaining sufficient financing on terms acceptable to us to fund continuing operations.
The Company believes that it has several important milestones, including data from and final reports from the Phase Ia/Ib human clinical trial for the Company’s broad-spectrum, antiviral drug NV-387. This Phase Ia/Ib human clinical trial is for evaluating the safety and tolerability of two oral formulations of NV-387, namely (i) NV-CoV-2 Oral Gummies, and (ii) NV-387 Oral Syrup, as described elsewhere, with COVID as the indication. The safety and tolerability data from this clinical trial is expected to be applicable as Phase
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Ia/Ib data for other indications of NV-387 as well, including RSV, MPOX, Influenza and others. Additional milestones include Pre-IND and IND filing to the US FDA for RSV and clinical trial application for Phase II clinical trial of NV-387 for the treatment of RSV infection in adults with the goal towards further regulatory advancement and approval of NV-387 for the treatment of pediatric RSV infection. Additionally, we believe that NV-387 qualifies for a Phase II clinical trial for the treatment of MPOX infection in Central African nations under the MEURI protocol of WHO because there is no other treatment available for this epidemic that is declared by the WHO as a public health emergency of international concern (MEURI = Monitored Emergency Use of Unregistered and Investigational Interventions.). We plan on initiating the Phase II study for MPOX as soon as feasible if we get the appropriate regulatory clearances. Additionally, we continue towards developing the Pre-IND and IND applications for a Phase IIa clinical trial of NV-387 for the treatment of RSV infection in adults, to be followed by a Phase IIb/III clinical trial of NV-387 for the treatment of RSV infection in hospitalized pediatric patients. To this end, we are also evaluating the possibility of a Phase IIa clinical trial of a RSV Infection Challenge in Humans.
As these milestones are achieved, the Company would likely experience improvement in the liquidity of the Company’s stock, and such improvement, if any, would enhance the Company’s ability to raise funds on the public markets at terms that may be favorable to the terms offered at present.
Management believes that it has on-going access to the capital markets including the “At-The-Market” (ATM) agreement with EF Hutton, the Sales Agent, that became active around April 5, 2024. However, we cannot provide assurance that the Company’s plans will not change or that changed circumstances will not result in the depletion of its capital resources more rapidly than it currently anticipates.
Requirement for Additional Capital
As of June 30, 2024 we have a cash balance of approximately $4,798,000 and raised an approximate additional $1.5 through September 10, 2024 through ATM sales of our common stock.
We believe we will need additional funding to continue further development of our drug candidates through later stages of human clinical trials into regulatory approvals if we do not form a collaborative licensing or partnership agreement with a party that would provide such funding such as Big Pharma.
These anticipated expenses for the subsequent period commencing on July 1, 2024 can be summarized as follows:
| 1. | Planned costs for remaining activities in the Phase Ia/Ib human clinical trial of NV-CoV-2 Oral Syrup and NV-CoV-2 Oral Gummies, including bioanalytical activities and reports. |
| 2. | Planned costs for the preparation of regulatory documents for filing an IND with the FDA to enter Phase II clinical trial for NV-387 as treatment of RSV infection in humans. These costs include staffing costs for the scientific staff and consulting firms to assist with FDA compliance, as well as material characterization, pharmaco-kinetic, pharmaco-dynamic and toxicology studies, and other items related to FDA compliance, as required for development of necessary data. We believe that we will be eligible to enter Phase II clinical trial for RSV indication based on the preliminary safety and tolerability data from the Phase Ia/Ib clinical trial; |
| 3. | Additional R&D Expenditures for RSV Project including regulatory non-clinical studies to enable treatment of children with NV-387. |
| 4. | Drug Substance and Drug Product Manufacturing costs, and |
| 5. | Corporate overhead. This includes budgeted office salaries, legal, accounting, investor relations, public relations, business development, and other costs expected to be incurred by being a public reporting company. |
As our programs mature and as we are able to move additional drug candidates into human clinical trials we will continue to require additional funding for such activities. The estimates assume that our drug candidates demonstrate effectiveness in humans that is consistent with the activity observed in animal studies, and therefore would require relatively few patients in each arm of each trial in order to establish statistically significant results.
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We believe that as our programs mature towards FDA approval, the Company’s market capitalization should improve substantially, based on market capitalizations of comparable public companies in clinical stages.
Management believes that as a result of the management plan, our existing resources and access to the capital markets will permit us to fund planned operations and expenditures for at least one year from the filing of the 10-K. However, we cannot provide assurance that our plans will not change or that changed circumstances will not result in the depletion of our capital resources more rapidly than we currently anticipate.
The Company has limited experience with pharmaceutical drug development. Thus, our budget estimates are not based on experience, but rather based on advice given by our associates and consultants. As such, these budget estimates may not be accurate. In addition, the actual work to be performed is not known at this time, other than a broad outline, as is normal with any scientific work. As further work is performed, additional work may become necessary or change in plans or workload may occur. Such changes may have an adverse impact on our estimated budget. Such changes may also have an adverse impact on our projected timeline of drug development.
Our strategy is to minimize capital expenditure. We therefore rely on third party collaborations for the testing of our drug candidates. We continue to engage with our previous collaborators.
Management further intends to use capital and debt financing, as required, to fund the Company’s operations. There can be no assurance that we will be able to obtain the additional capital resources, non-dilutive financings, grants and contracts, or pharmaceutical partnerships.
We are considered to be a clinical drug development stage company and will continue in the clinical drug development stage until we can get regulatory approvals and thereafter generate revenues from the sales of our products or services.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Accounting for Stock Based Compensation – The Company follows the provisions of ASC 718 – Stock Compensation, which requires the measurement of compensation expense for all shared-based payment awards made to employees, non-employee directors, and non-employees including employee stock options. Shared-based compensation expense is based on the grant date fair value estimated in accordance with the provisions of ASC 718 and is generally recognized as an expense over the requisite service period, net of forfeitures.
RECENT ACCOUNTING PRONOUNCEMENTS
Recently Issued Accounting Pronouncements
The Company considers the applicability and Impact of all Accounting Standard Updates (“ASU’s”). ASU’s not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s financial statements.
ASU 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures. The amendments in this Update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). Additionally, the ASU requires all entities to disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes, as well as individual jurisdictions where income taxes paid are equal to or greater than 5 percent of total income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 31, 2024. Early adoption is permitted and this ASU should be applied on a prospective basis. While the Company is currently evaluating the adoption impact of this ASU on its financial statements, the preliminary assessment is that the adoption of this standard is not expected to have a material effect on the Company’s financial statements and the Company’s disclosures.
ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The requirements of this update require disclosure of significant segments expenses and increase the frequency of segment reporting to interim periods. The ASU is effective for all public companies for fiscal years beginning after December 15, 2023 and for interim period beginning after December 15, 2024. Early adoption is permitted and is applicable to all periods presented in the financial statements unless retrospective application is impracticable. While the Company is currently evaluating the adoption impact of this ASU on its financial statements, the preliminary
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assessment is that the adoption of this standard is not expected to have a material effect on the Company’s financial statements and the Company’s disclosures.
There have been certain changes in ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it also simplifies the diluted earnings per share calculation in certain areas. The Company adopted this guidance on July 1, 2023 using the modified retrospective method. The adoption of this standard did not have a material effect on the Company’s financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by 17 C.F.R. 229 (10) (f) (i) and are not required to provide information under this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by Item 8 appears after the signature page to this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file under the Exchange Act is accumulated and communicated to our management including our chief executive officer and our chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Due to the inherent limitation of controls systems, not all misstatements may be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. Controls and procedures can only provide reasonable, not absolute, assurance that the above objectives have been met.
As of June 30, 2024, an evaluation was carried out under the supervision and with the participation of our management, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(f) under the Securities Exchange Act of 1934). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of June 30, 2024.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness, as of June 30, 2024, of our internal control over financial reporting based on the framework in 2013 Internal Control – Integrated Framework issued by the
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Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under this framework, our management concluded that our internal control over financial reporting was effective as of June 30, 2024.
Management has remediated the previously identified material weakness by maintaining effective procedures pertaining to the timely review of the Form 10-K. Specifically, the Company has established procedures for thorough review by Management, on a timely basis, of the Form 10-K. Management’s responsibility is to oversee that the Company is capable of developing accurate and timely financial information.
Changes in Internal Controls over Financial Reporting
Other than what was described below, there were no material changes in our system of internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during the three months ended June 30, 2024 that has materially affected, or is likely to materially affect, our internal control over financial reporting. During the year ended June 30, 2024, we have implemented changes in our internal control over financial reporting to remediate the prior years’ material weakness.
ITEM 9B. OTHER INFORMATION
On August 5, 2024, NanoViricides, Inc. consummated an Extension Agreement (the “Extension”) of the Employment Agreement with Dr. Anil Diwan entered into on July 1, 2018 (the “Employment Agreement”) to continue to serve as the President of the Company, effective July 1, 2024 under the same general terms and conditions. The Extension provides that Dr. Diwan will continue to serve as the Company’s President until June 30, 2025 at a base annual base salary of $400,000. Dr. Diwan shall be entitled to participate in all fringe benefits the Company provides for its employees generally and such other benefits as the Company provides for its senior executives. In addition, the Company shall maintain a Term Life Insurance policy for Dr. Diwan, valued at $2 million, of which $1 million shall be assigned to the Company and the remaining balance to Dr. Diwan’s estate. In addition, as an incentive towards the ultimate success of the Company, and to provide leadership authority to Dr. Diwan, the Company granted 10,204 shares of the Company’s Series A preferred stock, par value $0.00001 per share to Dr. Diwan. Dr. Diwan’s rights in the shares shall vest in equal, quarterly installments commencing on September 30, 2024 and fully vest on June 30, 2025. The Company will recognize non-cash compensation expense related to the issuance of the Series A Preferred Stock of $49,795 during the year ended June 30, 2025. Dr. Diwan will be eligible to receive severance if he is terminated by the Company other than for cause in which event the Company shall pay to Dr. Diwan an amount equal to six (6) month’s salary as severance compensation (without regard to compensation or benefits Dr. Diwan receives from any other source). Dr. Diwan shall be eligible for all benefits during this six (6) month period including bonuses, vesting of previously awarded stock options, health care insurance and other fringe benefits that have been ongoing. The Company may elect to pay such severance compensation in a lump sum or in equal payments over the six month period.
On August 5, 2024, NanoViricides, Inc. consummated an Extension to the CFO Agreement with its Chief Financial Officer Meeta Vyas effective July 1, 2024 (the “CFO Agreement Extension”) of the agreement originally entered into on May 30, 2013. The agreement is renewable on an annual basis. The original agreement provided for a term of three years with a base compensation of $9,000 per month and 129 shares of Series A Preferred Stock, also on a monthly basis. On January 1, 2015, her cash compensation was increased to $10,800 per month. The CFO Agreement Extension is for a period of one year from July 1, 2024 through June 30, 2025 under the same general terms as the prior CFO Agreement with amendments to provide that the CFO shall be reimbursed up to 50% of all costs of Health Insurance including any Medical, Dental, and any and all parts and subparts of Medicare Insurance that she subscribes to, not to exceed $2,500 per month.
By signing on September 23, 2024 and being effective as of September 20, 2024 the Company and its President and CEO, Dr. Anil R. Diwan, entered into an Amendment to Line of Credit Agreement whereby Dr. Diwan agreed to amend certain provisions of the standby Line of Credit with the Company to increase the maximum loan amount from $2,000,000 to $3,000,000 and to extend the maturity date for all amounts outstanding under the under the Line of Credit, including principal, accrued interest and other fees and charges, to March 31, 2026. Amounts drawn down under the Line of Credit shall bear interest at a fixed rate of 12%. Advancements under the Line of Credit are collateralized by an Open End Mortgage Deed on the Company’s real property at 1 Controls Drive, Shelton, Connecticut and a Chattel Mortgage (U.C.C-1 filing) against the Company’s equipment and fixtures. Any draw down under the Line of Credit requires the approval of the Company’s Board of Directors. The Amendment to the Line of Credit Agreement became effective as of September 22, 2024.
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By signing on September 23, 2024, and being effective as of September 20, 2024, the Company entered into a “Memorandum of Understanding for All Antivirals Drug Development” (the “MOU”) with TheraCour that granted to the Company, a limited, non-assignable, non-sublicensable, exclusive right of first refusal to license to any antiviral drugs in development or to be developed by TheraCour for research and development purposes only, for all as-yet unlicensed viral infection treatment indications. The MOU also clarified the roles and responsibilities of the parties and essentially codified the process that the parties have adopted since inception. The MOU further codified the treatment of all future milestone payments arising from any current or future license agreements to TheraCour to be consistent with the principles adopted in the February 12, 2024 Amendment to the COVID License Agreement.
(a) None.
(b) Corporate Governance
During the period covered by this Annual Report on Form 10-K, there were no changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors.
(c) Insider Trading Arrangements and Policies
During the three months ended June 30, 2024,
The Company has adopted insider trading policies and procedures governing the purchase, sale and other disposition of its securities by directors, officers and employees that management believes are reasonably designed to promote compliance with insider trading laws, rules, and regulations, and any listing standards applicable to the company. A copy of the Company’s insider trading policy is attached as Exhibit 19.1 hereto.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following table sets forth the names and ages of our current directors and executive officers, their principal offices and positions. Each executive officer holds the office until he/she resigns, is removed by the Board or his/her successor is appointed by the Board upon appropriate due diligence. Directors are elected biannually by our stockholders at the annual meeting. Each director holds his/her office until the successor is elected and qualified or his/her earlier resignation or removal.
The following persons are the directors and executive officers of our Company:
Name |
| Age |
| Title |
Anil Diwan, PhD. | 65 |
| President and Executive Chairman of the Board | |
Makarand “Mak” Jawadekar |
| 73 |
| Director, Independent |
Theodore Edward (“Todd”) Rokita |
| 54 |
| Director, Independent |
Brian Zucker |
| 62 |
| Director, Independent |
Meeta Vyas |
| 65 |
| Chief Financial Officer |
Anil Diwan, PhD, age 65, has been President and the Chairman of the Board of Directors of the Company since consummation of the merger on June 1, 2005. Dr. Diwan simultaneously therewith and since its formation, has also served as the Chief Executive Officer and Director of AllExcel, Inc. (from 1995 to the present) and TheraCour Pharma, Inc. (from 2004 to the present) and is the original inventor of the technologies licensed to NanoViricides Inc., as well as the TheraCour polymeric micelle technologies and products based on
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them. Since 1992, he has researched and developed TheraCour nanomaterials. Dr. Diwan was the first to propose the development of novel pendant polymers for drug delivery that led to an explosion of research in pharmacological applications of polymeric micelles. Dr. Diwan has won over 12 NIH SBIR grants. Dr. Diwan holds several issued patents, and three PCT international patent applications in various stages of prosecution in a number of countries, and also has several additional patentable discoveries. Dr. Diwan has held several scholastic distinctions, including an All-India 9th rank on the Joint Entrance Examination of all IIT’s. He holds a Ph.D. in Biochemical Engineering from Rice University (1986) and B.S. in Chemical Engineering from Indian Institute of Technology (IIT) Bombay (1980). We concluded Dr. Diwan’s experience plus his status as creator of the Company’s technologies render him uniquely qualified to serve in these capacities.
Makarand “Mak” Jawadekar, 73, was appointed as an Independent Member of the Board of Directors, and serves as a member of the Company’s Audit, Compensation and Nominating Committees. Dr. Jawadekar has over 35 years of experience in the pharma industry spanning both business and research activities. Dr. Jawadekar has extensive experience in joint ventures, alliance management, contracting, outsourcing, benchmarking, performance metrics, pharmaceutical research and development, drug delivery technologies, formulations, clinical supply manufacturing and packaging, clinical trial materials, pharmaceutics, and pharmaceutical sciences. He also has deep knowledge and global experience working across the United States, Europe, India, and other parts of Asia, including Japan and China. He has helped create several pharma R&D partnerships, joint ventures, and collaborations during his career. Dr. Jawadekar serves as a strategic advisor to pharmaceutical and biotechnology companies through his independent consultancy, founded in 2010, after retiring from Pfizer, Inc., as Director, Portfolio Management & Analytics, and as Vice President, Asia Colleague Resource Group, in Pfizer Global R&D division. From 1982 to 2010, Dr. Jawadekar held roles of increasing responsibility in technical, management, and business development positions at Pfizer, in the areas of Drug Delivery Technology Assessment, Strategic External Alliance Management, Strategic CMC, Pharma R&D, Clinical Manufacturing, Manufacturing Technology Transfer and Scale-up, beginning as a research scientist in formulations development. Dr. Jawadekar serves on the boards of two public companies, namely: Preveceutical Medical Inc. (CSE: PREV), and Cardax, Inc. (OTC: CDXI), as an independent board member. He also serves on the Strategic and Scientific Advisory Boards of several companies, including Actinium Pharma (NYSE-Amer.: ATNM), Saama Technologies, Inc., and Diant Pharma, Inc., as well as Tonino Lamborghini SpA, Italy. He also serves as a member of the Board of Directors at Abilities Inc., a New York based, non-profit organization. Mak holds a Ph.D. in Pharmaceutics from the University of Minnesota, and was honored with an honorary D.Sc. degree by DYP Mumbai University, recommended by the President of India. The Company believes Dr. Jawadekar’s long history as a pharmaceutical and biotech professional, particularly in alliance development and management, in business strategy, and in pharmaceutical sciences and CMC in drug delivery, render him well qualified to serve as an independent member of the Board of Directors.
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Theodore Edward (“Todd”) Rokita, 54, Director. Mr. Rokita was appointed as an Independent Member of the Board of Directors, and serves as a member of the Company’s Audit, Compensation and Nominating Committees. Mr. Rokita currently serves as the Attorney General of the State of Indiana, an elected office. Prior to that, he was co-owner and General Counsel and Vice President of External Affairs, Apex Benefits Group, Inc. where he served as a member of the executive team and the corporate board. He was responsible for legal strategies, including litigation, acquisitions and other matters, primarily involving ERISA and employment laws, and is responsible for the regulatory compliance of Apex’s clients. In his role, he served as the public face of the company and was responsible for external messaging, events, and other outreach functions. Mr. Rokita was elected to the United States Congress as a Representative from the State of Indiana, serving four terms from 2011 to 2019. As a member of the US Congress, he served as the Chairman, House Subcommittee on Early Childhood, Elementary, and Secondary Education, as the Vice Chairman, House Committee on the Budget, as a Member, House Committee on Education and the Workforce (Health, Employment, Labor and Pensions subcommittee), as a Member, House Committee on Transportation and Infrastructure, (aviation, railroad, and pipeline subcommittees), as a Member, Committee on House Administration (2011-2014), as a Member, Steering Committee (2011-2012) (elected by peers to make their committee assignments), and also as a Director, Republican Study Committee (2014- 2019) (group affecting policy direction and tactics). Prior thereto Mr. Rokita served as the Secretary of State, Indiana, from 2003 to 2011) and as Chief Operating Officer and General Counsel, Office of Indiana Secretary of State from 2000-2002. Mr. Rokita serves or has served as a Member of the Board of Directors on a number of commercial and charitable institutions, among them: Aircraft Owners and Pilots Association Foundation, (2014-Present); Achieve International, Indianapolis, IN (helping troubled teens), (2012-2018); Saint Vincent Hospital Foundation, (2011-2013); Indiana Council for Economic Education, (2004-2010). Mr. Rokita also serves or has served as an Advisory Board Member for several institutions, among them: Merchandise Warehouse, Inc. Indianapolis, IN, (2019-Present); WishBone Medical, Inc., Warsaw, IN, (2019-Present); and Acel 360, Inc., Reston, VA (2019-Present). Mr. Rokita has also served as a Member, Board of Trustees of Saint Joseph’s College, Rensselaer, IN, (2007-2017). In addition to his public service, Mr. Rokita is involved as a Volunteer for the Veterans Airlift Command and Angel Flight, Volunteer (2011- Present), actively flying missions for Veterans Airlift Command and other similar non-profits dedicated to providing free air transportation to children and post-9/11 combat wounded veterans and their families for medical and other compassionate purposes. Mr. Rokita holds a Bachelor of Arts degree from Wabash College in Crawfordsville, Indiana, where he was an Eli Lilly Fellow and a Juris Doctor from IUPUI’s Indiana University Robert H. McKinney School of Law. The Company believes Mr. Rokita’s long history as an executive and as a board member of a number of institutions and his long record of public service, uniquely qualifies him to serve as a member of the Company’s Board of Directors.
Brian Zucker, 62, Director. Since October 2011, Mr. Zucker has been a Partner at CFO Financial Partners, LLC, a firm that provides outsourced CFO (Chief Financial Officer), Controller and Financial Operations services as well as back office reporting and bookkeeping services for public and private companies, broker dealers, hedge funds, and family offices and high net worth individuals, among others. Mr. Zucker also serves as the CFO and Financial Operations Principal for numerous broker dealers and hedge funds. In addition to and simultaneously therewith, Mr. Zucker has served as a Partner at RRBB Accountants & Advisors, (aka Rosenberg Rich Baker Berman & Co.), a full-service accounting, advisory and consulting firm located in Central New Jersey. Mr. Zucker has over thirty years of experience as a CPA specializing in the securities industry. From 1983 through 1986, Mr. Zucker was a Senior Consultant at Deloitte Haskins and Sells and at Price Waterhouse from January 1987 through September 1989. He has previously served as the President and Chairman of Atlantis Business Development Corp. (ABDV), CFO of Natcore Solar Technology, Inc. (NTCXF) and as a Managing Director of American Frontier Financial Corp. (EVIS). He is on the Board of Directors of National Investment Banking Association (NIBA). Mr. Zucker obtained a B.S. in Public Accounting from Pace University. The Company believes Mr. Zucker’s extensive career as a public accountant and experience providing sophisticated accounting services to public companies and broker dealers, render him well qualified to serve as an independent member of the Board of Directors, as well as its Audit, Compensation, Nominating and Governance Committees. Mr. Zucker was appointed as a director in 2020 and as Chair of the Audit Committee in 2022.
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Meeta Vyas, SB, MBA, 65, is known as a strong leader with board level experience and successful achievements as a Senior Executive in a broad range of entities including publicly listed corporations, non-revenue generating entities, and medium to large size companies. Ms. Vyas has over twenty-five years of experience in performance and process improvement of both publicly listed companies and non-revenue producing entities, in areas ranging from Finance and Operations to Strategy and Management. Meeta holds the distinction of being the first Indian woman to be named CEO of a publicly listed U.S. corporation, Signature Brands, Inc., best known for “Mr. Coffee” and “Health-O-Meter” brand products. As CEO, acting COO and Vice Chairman of the Board of Signature Brands, Inc., she was responsible for the development and implementation of a turnaround plan, resulting in Signature’s return to profitability and growth. Later, as the CEO of the World-Wide Fund for Nature - India (WWF-India) and then as a Vice President of the National Audubon Society (USA), both non-revenue generating entities, Meeta successfully raised unrestricted funding that significantly exceeded annual requirements and also instituted financial processes to measure a variety of performance metrics. Earlier in her career, she was responsible for designing the strategy and initiating the implementation plan for the highly successful information technology outsourcing program at General Electric (“GE”). Also at GE, Ms. Vyas ran GE Appliances’ Range Products business unit having revenues exceeding $1 billion where her team doubled operating income in less than two years. Prior to that, as a management consultant with McKinsey and Company, she served publicly listed companies in chemicals, industrial, and technology markets, primarily focusing on growth strategies, valuations, post-merger integrations, and logistics operations. Ms. Vyas is married to Anil Diwan, the Company’s President and Chairman and principal shareholder of TheraCour Pharma, Inc. Ms. Vyas holds a MBA in Finance from Columbia University’s Graduate School of Business, and a SB in Chemical Engineering from the Massachusetts Institute of Technology. We concluded that Ms. Vyas’ experience and training render her qualified to serve as the Company’s Chief Financial Officer. Meeta Vyas has been the Company’s Chief Financial Officer since 2013.
AUDIT COMMITTEE
On November 13, 2020 Brian Zucker was appointed as independent director and member of the Audit Committee. Due to his education and extensive experience as a Certified Public Accountant, Mr. Zucker meets the criteria of an independent director and an “Audit Committee Financial Expert” as provided in Release 33-8173 and 34-47235. In 2022 Brian Zucker was appointed Chairman of the Audit Committee.
CODE OF ETHICS
We have adopted a code of ethics meeting the requirements of Section 406 of the Sarbanes-Oxley Act of 2002. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of violations; and provide accountability for adherence to the provisions of the code of ethic. Our code of ethics is filed as an exhibit to this Form 10-K.
INSIDER TRADING POLICY
We have adopted an Insider Trading Policy that provides guidance to employees (including officers) and directors with respect to transactions in the Company’s securities. The Insider Trading Policy is designed to promote compliance with insider trading laws, rules and regulations and any listing standards applicable to the Company. The policy also prohibits directors, officers and other employees from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds), or otherwise engaging in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities without our prior approval.
A copy of the Company’s Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
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ITEM 11. EXECUTIVE COMPENSATION
The following table reflects all forms of compensation for the years ended June 30, 2024, and 2023.
Name and |
|
|
|
|
| Stock |
|
|
| All Other |
|
| ||||||||
Principal | Bonus | Award(s) | Option | Compensation |
| |||||||||||||||
Position |
| Year |
| Salary |
| ($) |
| ($) |
| Awards |
| ($) |
| Total ($) | ||||||
Anil Diwan |
| 2024 | $ | 400,000 | $ | — | $ | 32,498 | — | $ | — |
| $ | 432,498 | ||||||
CEO, President, Director |
| 2023 | $ | 400,000 | $ | — | $ | 43,721 | — | $ | — |
| $ | 443,721 | ||||||
Meeta Vyas |
| 2024 | $ | 129,600 | $ | — | $ | 5,907 |
| — | $ | — | $ | 135,507 | ||||||
CFO |
| 2023 | $ | 129,600 | $ | — | $ | 7,748 |
| — | $ | — | $ | 137,348 | ||||||
The following table sets forth for each named executive officer certain information concerning equity awards as of June 30, 2024.
|
|
|
|
|
|
|
|
|
|
|
|
|
| Equity | |||
Incentive | |||||||||||||||||
Equity | Plan | ||||||||||||||||
Incentive | Awards: | ||||||||||||||||
Plan | Market or | ||||||||||||||||
Number | Market | Awards: | Payout | ||||||||||||||
of | Value of | Number of | Value of | ||||||||||||||
Shares | Shares | Unearned | Unearned | ||||||||||||||
Number of | Number | or Units | or Units | Shares, | Shares, | ||||||||||||
Securities | of Securities | of Stock | of Stock | Units or | Units or | ||||||||||||
Underlying | Underlying | that | that | Other | Other | ||||||||||||
Name and | Unexercised | Unexercised | Option | Option | Have | Have | Rights that | Rights that | |||||||||
Principal | Options | Options | Exercise | Expiration | Not | Not | Have Not | Have Not | |||||||||
Position |
| Exercisable |
| Unexercisable |
| Price ($) |
| Date |
| Vested |
| Vested |
| Vested |
| Vested | |
Anil Diwan, President, Director, and CEO |
| — |
| — | $ | — |
| — |
| — |
| — |
| — |
| — | |
Meeta Vyas Chief Financial Officer |
| — |
| — | $ | — |
| — |
| — |
| — |
| — |
| — | |
COMPENSATION OBJECTIVES
We believe that the compensation programs for the Company’s executive officers should reflect the Company’s performance and the value created for the Company’s stockholders. In addition, the compensation programs should support the short-term and long-term strategic goals and values of the Company, and should reward individual contributions to the Company’s success. Our compensation plans are consequently designed to link individual rewards with Company’s performance by applying objective, quantitative factors including the Company’s own business performance and general economic factors. We also rely upon subjective, qualitative factors such as technical expertise, leadership and management skills, when structuring executive compensation in a manner consistent with our compensation philosophy.
ELEMENTS OF COMPENSATION
BASE SALARY. All full-time executives are paid a base salary. Base salaries for our executives are established based on the scope of their responsibilities, professional qualifications, academic background, and the other elements of the executive’s compensation, including stock-based compensation. However, at this time current total annual compensation is not in line with comparable companies, because our philosophy was to pay modest salaries with minimum bonuses to conserve capital resources for future company growth. Our intent is to set executives’ base salaries near the median of the range of salaries for executives in similar positions with similar responsibilities at comparable companies, in line with our compensation philosophy. Base salaries are reviewed annually, and may be increased to align salaries with market levels after taking into account the subjective evaluation described previously.
EQUITY INCENTIVE COMPENSATION. We believe that long-term performance is achieved through an ownership culture participated in by our executive officers through the use of stock-based awards. Currently, we do not maintain any incentive compensation plans based on pre-defined performance criteria. The Board of Directors has the general authority, however, to award equity incentive compensation, i.e. stock options, to our executive officers in such amounts and on such terms as the committee
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determines in its sole discretion. The Board of Directors does not have a determined formula for determining the number of options available to be granted. The Board of Directors will review each executive’s individual performance and his or her contribution to our strategic goals periodically. Our Board of Directors grants equity incentive compensation at times when we do not have material non-public information to avoid timing issues and the appearance that such awards are made based on any such information.
DETERMINATION OF COMPENSATION
The Company’s executive compensation program for the named executive officers (NEOs) is administered by the Board of Directors. The Board of Directors makes independent decisions about all aspects of NEO compensation, and takes into account compensation data and benchmarks for comparable positions and companies in different applicable geographical areas. The Compensation Committee of the Board assists the Board in achieving these objectives.
ERRONEOUS COMPENSATION RECOVERY POLICY
The Company adopted an Erroneous Compensation Recovery Policy in order to comply with NYSE Rule 811 and Rule 10D-1 under the Exchange Act. In the event the Company is required to prepare an accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, subject to the terms of the policy, the Company must recover reasonably promptly from its current and former executive officers the amount of any erroneously awarded incentive based compensation received on or after October 2, 2023 and during the three (3) years preceding the date that the Company is required to prepare such accounting restatement. The Erroneous Compensation Recovery Policy has been filed as Exhibit 97.1 of this Annual Report.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT, AND RELATED STOCKHOLDERS MATTERS.
The following table sets forth, as of June 30, 2024, certain information regarding the beneficial ownership of the Company’s Common Stock and Series A Convertible preferred stock outstanding by (i) each person known to us to own or control 5% or more of our Common Stock, (ii) each of our directors, (iii) each of our “Named Executive Officers” (as defined in Item 402(a)(3) of Regulation S-K) and (iv) our current Named Executive Officers and directors as a group. Unless otherwise indicated, each person named in the table below has sole voting and investment power with respect to the shares beneficially owned.
|
|
|
| Series A Convertible |
| ||||||
Common Stock | Preferred Stock(1) |
| |||||||||
Amount and | Amount and | Percent |
| ||||||||
Nature of | Percent | Nature of | Percent | of |
| ||||||
Beneficial | of | Beneficial | of | Voting |
| ||||||
Name and Address of Beneficial Owner |
| Owner(2) |
| Class(2) |
| Owner(2) |
| Class(2) |
| Power(3) |
|
TheraCour Pharma, Inc.(4) |
| 470,961 |
| 3.6 | % | 681,859 |
| 76.4 | % | 31.2 | % |
Anil Diwan(4)(5) |
| — |
| — |
| 116,683 |
| 13.1 | % | 5.0 | % |
Meeta Vyas(6) |
| 7,129 |
| — |
| 17,140 |
| 1.9 | % | 0.8 | % |
Makarand Jawadekar |
| 30,496 |
| 0.2 | % | — |
| — |
| 0.1 | % |
Theodore Rokita |
| 29,969 |
| 0.2 | % | — |
| — |
| 0.1 | % |
Brian Zucker |
| 28,746 |
| 0.2 | % | — |
| — |
| 0.1 | % |
All Directors and Executive Officers as a Group (6 persons) |
| 567,301 |
| 4.2 | % | 815,682 |
| 91.4 | % | 37.3 | % |
| (1) | The Series A Convertible preferred shares (the “Series A”) vote at the rate of nine shares of common stock per each share of Series A and is convertible into three and one half shares of common stock upon a change in control of the Company. |
| (2) | For each shareholder, the calculation of percentage of beneficial ownership is based upon 13,144,055 shares of common stock and 892,625 shares of Series A preferred stock outstanding, and shares of common stock subject to options, warrants and/or conversion rights held by the shareholder that are currently exercisable or exercisable within 60 days, which are deemed to be outstanding and to be beneficially owned by the shareholder holding such options, warrants, or conversion rights. The percentage ownership of any |
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| shareholder is determined by assuming that the shareholder has exercised all options, warrants and conversion rights to obtain additional securities and that no other shareholder has exercised such rights. |
| (3) | Amount stated reflects the number of votes held on all matters submitted to a vote of our stockholders. |
| (4) | Anil Diwan, the Company’s President and Chairman, also serves as the CEO and Director of TheraCour Pharma Inc. and owns approximately 90% of the outstanding capital stock of TheraCour. Anil Diwan has both investment and dispositive power over the NanoViricides shares held by TheraCour Pharma, Inc. |
| (5) | Does not include 470,961 shares of common stock nor the 681,859 shares of Series A preferred stock owned by TheraCour Pharma, Inc. which votes at the rate of nine shares of common stock for each Share of Series A preferred stock (the “Series A preferred stock”), over which Anil Diwan holds voting and dispositive power. Does not include the beneficial ownership of the securities held by Meeta Vyas, the wife of Anil Diwan, and Armstoo Irrevocable Trust over which Dr. Diwan disclaims beneficial ownership and voting and dispositive control. |
| (6) | Includes 1,072 shares held by Connect Capital LLC, over which Ms. Vyas holds voting and dispositive power. Does not include the beneficial ownership of the securities held by Anil Diwan, the husband of Ms. Vyas, TheraCour, nor 94,471 common shares held by Armstoo Irrevocable Trust over which Ms. Vyas disclaims beneficial ownership and voting and dispositive control. |
EMPLOYMENT AGREEMENTS
The Company and Dr. Diwan entered into an extension of employment agreement effective July 1, 2018 for a term of three years. Dr. Diwan’s will be paid an annual base salary of $400,000. Additionally, Dr. Diwan was awarded a grant of 26,250 shares of the Company’s Series A preferred stock. 8,750 shares vest equally on June 30, 2019, 2020 and 2021. Any unvested shares are subject to forfeiture. On September 24, 2021, the Company and Dr. Diwan entered into extension of the employment agreement for a period of one year from July 1, 2021 through June 30, 2022 under the same general terms and conditions. The Company granted Dr. Diwan an award of 10,204 shares of the Company’s Series A Preferred Stock. The shares will be deemed partially vested in quarterly installments following the grant date and fully vested on June 30, 2022. The employment agreement is renewable annually with approval by the Board of Directors. On October 6, 2022, the Company agreed to the extension of the employment agreement for a period of one year from July 1, 2022 through June 30, 2023 under the same general terms and conditions. The Company granted Dr. Anil Diwan an award of 10,204 shares of the Company’s Series A Preferred Stock. The shares will be deemed partially vested in quarterly installments following the grant date and fully vested on June 30, 2023. As of July 1, 2023, the Company agreed to the extension of the employment agreement for a period of one year from July 1, 2023 through June 30, 2024 under the same general terms and conditions. The Company granted Dr. Anil Diwan an award of 10,204 shares of the Company’s Series A Preferred Stock. The shares will be deemed partially vested in quarterly installments following the grant date and fully vested on June 30, 2024. As of July 1, 2024, the Company agreed to the extension of the employment agreement for a period of one year from July 1, 2024 through June 30, 2025 under the same general terms and conditions. The Company granted Dr. Anil Diwan an award of 10,204 shares of the Company’s Series A preferred stock. The shares will be deemed partially vested in quarterly installments following the grant date and fully vested on June 30, 2025.
On March 3, 2010, the Company entered into an employment agreement with Dr. Jayant Tatake to serve as Vice President of Research and Development. The employment agreement provides for a term of four years with a base salary of $150,000. In addition, the Company issued 1,340 shares of Series A preferred stock and 1,786 shares of common stock upon entering into the agreement, and will issue an additional 1,340 shares of Series A Preferred Stock and 1,786 shares of common stock on each anniversary date of the agreement. The shares of Series A preferred stock were issued in recognition of Dr. Tatake’s work towards the achievement of several patents by the Company. The Compensation Committee of the Board of Directors has extended the current provisions of the employment agreement pending its review of current industry compensation arrangements and employment agreements.
On May 30, 2013, the Company entered into an agreement with Meeta Vyas, to serve as its Chief Financial Officer. Ms. Vyas incidentally is married to our President and Chairman of the Board, Anil Diwan. The CFO agreement provided for a term of three years with a base compensation of $9,000 per month and 129 shares of Series A Preferred Stock, also on a monthly basis. On January 1, 2015, her cash compensation was increased to $10,800 per month. The agreement is renewable on an annual basis. As of July 1, 2023, the Company agreed to the extension of the CFO agreement for a period of one year from July 1, 2023 through June 30, 2024 under the same general terms as the prior CFO Agreement with amendment to provide that the CFO shall be reimbursed up to 50% of all costs of Health Insurance including any Medical, Dental, and any and all parts and subparts of Medicare Insurance that she subscribes to, not to
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exceed $2,500 per month. As of July 1, 2024, the Company agreed to the extension of the CFO agreement for a period of one year from July 1, 2024 through June 30, 2025 under the same general terms as the prior CFO Agreement.
COMPENSATION OF DIRECTORS
At this time, directors, who are officers of the Company, receive no remuneration for their services as directors of the Company. The Company reimburses directors for expenses incurred in their service to the Board of Directors. The Company paid fees to its independent directors of $45,000 to each Director, of which $11,250 is to be paid in the Company’s common stock commensurate with their contracts.
COMPENSATION OF SCIENTIFIC ADVISORY BOARD
The Company anticipates holding four Scientific Advisory Board (SAB) meetings per annum. As compensation, each member of the Scientific Advisory Board will be granted 286 warrants each quarter to purchase the Company’s common stock at 120% of the Company’s closing stock quote on the day following the meeting. Should the Company not call a quarterly meeting, quarterly warrants will be granted on May 15, August 15, November 15, and February 15. The warrants have a four-year expiration date. In addition, the Company will reimburse each SAB member for travel and other out-of-pocket expenses incurred in the course of performing their services. For the years ended June 30, 2024 and 2023, the SAB was granted a total of 1,144 and 1,144 of stock warrants, respectively. The warrants are exercisable into common shares at prices from $1.43 to $2.43, and $1.39 to $3.40 per share, respectively.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
NanoViricides, Inc, the Company, has adopted a “Code of Conduct and Ethics” in its corporate governance as well as policies and procedures regarding related party transactions.
Management, under the direction of the Board of Directors, follows the policies and procedures regarding related party transactions.
TheraCour Pharma, Inc.
TheraCour currently holds 470,961 shares of the Company’s common stock and 681,859 shares of the Company’s Series A preferred stock.
On May 12, 2005, we entered into a material license agreement, amended as of January 8, 2007 (the “License”) with TheraCour Pharma, Inc. (“TheraCour”). Anil Diwan, our founder, President and Chairman, owns approximately 90% of TheraCour’s capital stock. We were granted exclusive licenses in perpetuity for technologies developed by TheraCour for the virus types: Human Immunodeficiency Virus (HIV/AIDS), Influenza including Asian Bird Flu Virus, Herpes Simplex Virus (HSV-1 and HSV-2), Hepatitis C Virus (HCV), Hepatitis B Virus (HBV), and Rabies. On February 15, 2010, we entered into an Additional License Agreement with TheraCour. Pursuant to the exclusive Additional License Agreement, in consideration for the issuance of 100,000 shares of our Series A preferred stock, (the “Series A preferred”), we were granted exclusive licenses, in perpetuity, for technologies, developed by TheraCour, for the development of drug candidates for the treatment of Dengue viruses, Ebola/Marburg viruses, Japanese Encephalitis, viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes.
In consideration for obtaining these exclusive licenses, we agreed: (1) that TheraCour can charge its costs (direct and indirect) plus no more than 30% of a specified portion of certain direct costs as a Development Fee and such development fees shall be due and payable in periodic installments as billed; (2) we will pay the greater $2,000 or actual costs monthly, whichever is higher, for other general and administrative expenses incurred by TheraCour on our behalf; (3) make royalty payments (calculated as a percentage of net sales of the licensed drugs) of 15% (calculated as a percentage of net sales of the licensed drugs) to TheraCour; (4) TheraCour retains the exclusive right to develop and manufacture the licensed drugs. TheraCour will manufacture the licensed drugs exclusively for us, and unless such license is terminated, will not manufacture such product for its own sake or for others; and (5) TheraCour may request and we will pay an advance payment (refundable) equal to twice the amount of the previous month’s invoice to be applied as a prepayment towards expenses. TheraCour may terminate the license upon a material breach by us as specified in the agreement. However, we may avoid such termination if within 90 days of receipt of such termination notice we cure the breach.
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On November 1, 2019, the Company entered into a License Agreement (the “Agreement”) with TheraCour for an exclusive, worldwide license to use, promote, offer for sale, import, export, sell and distribute products for the treatment of Varicella Zoster Virus derived indications. The Company was not required to make any upfront payments to TheraCour and agreed to the following milestone payments to TheraCour; the issuance of 75,000 shares of Series A preferred stock upon the grant of an IND application; $1,500,000 in cash upon completion of Phase I clinical trials; $2,500,000 in cash upon completion of Phase II clinical trials; and $5,000,000 in cash upon completion of Phase III clinical trials. In addition, the Company is required to pay to TheraCour fifteen percent (15%) of net sales of licensed products, and any income from sublicensed products. Under the Agreement, TheraCour retains the exclusive right to develop and manufacture the Licensed Products. As in previous licensing agreements with TheraCour, the Company agreed to pay the following amounts to TheraCour to the extent not previously paid under existing licensing agreements: (1) costs (direct and indirect) plus 30%, subject to certain specified exclusions, as a Development Fee and such development fees shall be due and payable in periodic installments as billed and (2) a deposit equal to estimated development costs for two months (refundable), such estimates to be reconciled quarterly. Payments not made within 90 days after due date will be charged an interest at the rate of 1% per month. TheraCour and the Company have agreed to enter into a manufacture and supply agreement, under which TheraCour would manufacture the licensed products exclusively for the Company, and the Company would also have customary backup manufacture rights, as specified in the Agreement. TheraCour may terminate the license upon a material breach by the Company as specified in the agreement. However, the Company may avoid such termination if the breach is cured within 90 days of receipt of such termination.
On September 7, 2021, the Company entered into a license agreement for the field comprising anti-viral treatments for coronavirus derived human infections with TheraCour (the “COVID License Agreement”). Previously, on June 9, 2020, we had announced signing of a Memorandum of Understanding (“CoV MoU”) with respect to anti-viral treatments for coronavirus derived human infections (the “Field”) with TheraCour Pharma, Inc., which is now perfected into this licensing Agreement. The licensed field includes antiviral drugs to treat SARS-CoV-2 and its variants that cause the COVID-19 disease resulting in a global pandemic that continues to rage through the world, wave after wave, as new variants develop and take hold. There was no upfront cash payment for the license and the compensation terms were generally consistent with prior licenses, and are summarized below.
Under the COVID License Agreement, the Company obtained a world-wide, exclusive, sub-licensable, license to use, promote, offer for sale, import, export, sell and distribute antiviral drugs that treat human Coronavirus infections using TheraCour’s proprietary as well as patented technology and intellectual property, including the new patent application cited above. The discovery of ligands and polymer materials as well as formulations, the chemistry and chemical characterization, as well as process development and related work will be performed by TheraCour under the same compensation terms as prior agreements between the parties, with no duplication of costs allowed. We will not make any upfront cash payments to TheraCour and we have agreed to the following milestone payments to TheraCour: 100,000 shares of the Company’s Series A preferred stock, par value $0.00001 per share (the “Series A preferred stock”) upon the execution of the Agreement; 50,000 shares of Series A preferred stock after the grant of the approval of Licensee’s Investigational New Drug (IND) Application, or its equivalent; cash payments of $1,500,000 after the initiation of Phase I clinical trials or its equivalent; $2,000,000 after the completion of Phase I clinical trials or its equivalent for at least one product within twelve (12) months from the date of the acceptance of the IND; $2,500,000 no later than six (6) months after the completion of Phase IIA clinical trials or its equivalent for at least one product within twenty (24) months from the date of the completion of Phase I or its equivalent; 100,000 shares of Series A preferred stock after the initiation of Phase III clinical trials or its equivalent; and, at TheraCour’s option, $5,000,000 in cash or 500,000 shares of Series A preferred stock, no later than six (6) months after the completion of Phase III clinical trials or its equivalent for at least one product within thirty-six (36) months from the completion of Phase II clinical trials or its equivalent. In addition, we agreed to pay to TheraCour fifteen percent (15%) of net sales of licensed products and any income from sublicensed products, consistent with previous agreements. Under the COVID License Agreement, TheraCour retains the exclusive right to develop and manufacture the licensed products. The Agreement contemplates that the parties will enter into a separate manufacturing and supply agreement for the commercial manufacture and supply of the drug products if and when we intend to engage into commercialization of the drugs. The COVID License Agreement provides that the Manufacturing and Supply agreement would be on customary and reasonable terms, on a cost-plus basis, using a market rate based on then-current industry standards, and include customary backup manufacturing rights, as with prior agreements. The Series A preferred stock is only convertible upon a “change of control” of the Company as defined in its full specification, are non-transferrable and have no trading market. Each Series A share carries 9 votes, and is convertible only upon a change of control into 3.5 shares of the Company’s common stock.
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On April 20, 2023, the Company was notified that the Company’s licensee, KMPL, was authorized to enter into Phase Ia/Ib clinical trials of its COVID, NV-CoV-2 Oral Syrup and its NV-CoV-2 Oral Gummies after satisfying the conditions of a conditional authorization received on or about January 27, 2023. Pursuant to the TheraCour – Nanoviricides COVID License Agreement a milestone payment of 50,000 shares of the Company’s Series A preferred shares was issued to Theracour Pharma, Inc. On June 14, 2023, the Company was notified that the Company’s licensee, KMPL, has commenced volunteer recruitments for Phase Ia/Ib clinical trials of the NV-CoV-2 Oral Syrup and NV-CoV-2 Oral Gummies. Pursuant to the TheraCour–Nanoviricides COVID License Agreement a milestone payment of $1,500,000 became due and has been recorded as a non-current liability on the accompanying balance sheet.
Pursuant to a COVID License Agreement dated September 7, 2021 between the Company and TheraCour, the Company is obligated to make certain milestone payments to TheraCour upon achieving certain milestones. TheraCour had achieved the milestone regarding the “Initiation of Phase I Clinical Trials or Equivalent” within 3 months from regulatory approval. Upon achieving this milestone, the Company was obligated to pay TheraCour a cash milestone payment in the amount of $1,500,000. In lieu of this cash payment, TheraCour agreed to accept a Convertible Promissory Note in the principal amount of $1,500,000 effective July 19, 2023 (the “Note”). The Note accrues interest at the rate of twelve percent (12%) per annum and is due and payable on January 19, 2025. The Note is convertible, at TheraCour’s option, into shares of the Company’s Series A preferred stock, par value $0.00001 (the “Series A Shares”) at the conversion price specified in the terms and conditions contained within the Note. Dr. Diwan recused himself from voting on any action of the Registrant’s Board of Directors in connection with the License Agreement and the Note (as that term is defined herein), and any discussions related thereto. On October 27, 2023 TheraCour exercised its right to convert the principal of the July 19, 2023 Note into 331,859 shares of the Company’s Series A preferred stock. Furthermore, TheraCour cancelled all of the accrued interest on the Note totaling approximately $49,800 which has been reported as a capital transaction credit to additional paid in capital on the accompanying statements of changes in stockholders’ equity.
On February 12, 2024 the Company requested and TheraCour agreed to suspend the existing license requirement to maintain an advance with TheraCour equal to two months of projected TheraCour invoices which is recalculated quarterly. The suspension will remain in effect until such time as the Company is able to raise sufficient capital. The existing available advance will be applied towards payment of TheraCour invoices.
On February 13, 2024, the Company and TheraCour amended the COVID License Agreement (the “Amendment”). The Amendment provides that the as yet unearned and unremitted cash awards specified in the COVID License Agreement for milestone payments shall not be due and payable until the Company achieves a revenue event which shall mean, but not be limited to, the receipt of revenue by the Company generated from, but not limited to, sources such as (1) research and development grants, government contracts, non-profit organizations and other sources to the extent that the amount of recognized revenue (as defined in the Amendment) is only considered to be the profit portion of revenue event, if any; (2) licensing of third-party development partnerships to the extent recognized revenue is considered to include only the profit or retained earnings portion received from such deals (and exclude any at-cost-reimbursements); (3) drug commercialization wherein recognized revenue shall be the amount of gross profit (i.e., net sales less cost of net sales); or (4) other sources of revenue such as gross profits from private contract work. Additionally, the Amendment provides that no more than 50% of the recognized revenue shall be applied for remitting such consideration at the time of payment. Further the Amendment clarifies that financing raised by the Company from sale of equity, mortgage or debt transactions, and such other instruments shall not be regarded as recognized revenue.
By signing on September 23, 2024 and being effective as of September 20, 2024, the Company entered into a “Memorandum of Understanding for All Antivirals Drug Development” (the “MOU”) with TheraCour that granted to the Company, a limited, non-assignable, non-sublicensable, exclusive right of first refusal to license to any antiviral drugs in development or to be developed by TheraCour for research and development purposes only, for all as-yet unlicensed viral infection treatment indications. The MOU also clarified the roles and responsibilities of the parties and essentially codified the process that the parties have adopted since inception. The MOU further codified the treatment of all future milestone payments arising from any current or future license agreements to TheraCour to be consistent with the principles adopted in the February 12, 2024 Amendment to the COVID License Agreement.
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COVID-19 Related Drugs: Patent Coverage and Lifetime
Two International PCT patent applications have been filed relating to the application of the TheraCour polymeric micelle technology to drug development for Coronavirus antiviral drugs including ones for the treatment of COVID-19; PCT/US21/39050 was filed on June 25, 2021. Additionally, PCT/US22/35210 was filed on June 28, 2022, with a request for the same priority date as that of the prior PCT/US21/39050 application. These new broad patents cover new compositions of matter, methods of making them (processes), drug formulations, and uses of the articles of manufacture. The patents resulting from these are expected to have expiry dates extending at least into the year 2043, with additional specific extensions possible in various countries based on regulatory extensions for pharmaceutical products. All ensuing patents will be automatically exclusively licensed to NanoViricides for anti-coronavirus drugs pursuant to the “CoV License Agreement”. The nominal expiry date for these PCT applications would be 20 years, after filing and if issued, i.e. June 24, 2041, and could be extended in certain countries under regulatory extensions to as late as into the year 2043, providing a significant commercial runway.
TheraCour acquired property and equipment on behalf of the Company from third party vendors and transferred property and equipment, to the Company, at cost, in the approximate amounts of $115,000 and $32,000 for the fiscal years ended June 30, 2024 and 2023 respectively.
Accounts payable to TheraCour were approximately $720,000 and $233,000 (net of a $500,000 advance) at June 30, 2024 and June 30, 2023, respectively.
Development fees and other costs charged by TheraCour were approximately $2,550,000 and $2,536,000 for the years ended June 30, 2024 and 2023, respectively. No royalties are due or have been paid from inception through June 30, 2024.
As of June 30, 2024 TheraCour owned 470,961 shares of the Company’s outstanding common stock and 681,859 shares of Series A Preferred Stock, which votes at the rate of nine shares of common stock per each share of Series A Preferred Stock and is convertible into three and one half shares of common stock upon a change in control of the Company. Dr. Diwan, also serves as the CEO and Director of TheraCour and owns approximately 90% of the outstanding capital stock of TheraCour.
Line of Credit - Related Party – Anil Diwan
On November 13, 2023, the Company’s President and Executive Chairman, Dr. Anil Diwan, entered into a Line of Credit Agreement whereby Dr. Diwan agreed to provide a standby Line of Credit to the Company in the maximum amount of $2,000,000. All amounts outstanding under the Line of Credit, including principal, accrued interest and other fees and charges, will be due and payable on December 31, 2024. Amounts drawn down under the Line of Credit shall bear interest at a fixed rate of 12%. Advancements under the Line of Credit will be collateralized by an Open End Mortgage Deed on the Company’s real property at 1 Controls Drive, Shelton, Connecticut and a Chattel Mortgage (U.C.C - 1 filing) against the Company’s equipment and fixtures. Any draw down under the Line of Credit requires the approval of the Company’s Board of Directors. On February 12, 2024 the Company, pursuant to Article 2.5 of the Company’s Line of Credit Agreement with Dr. Anil Diwan, signed an Extension Agreement which extended the maturity of the Company’s Line of Credit from December 31, 2024 to December 31, 2025. By signing on September 23, 2024 and by being effective as of September 20, 2024, the Company, pursuant to Article 2.5 of the Company’s Line of Credit Agreement with Dr. Anil Diwan, signed an amendment agreement which increased the available line of credit from $2 million to $3 million, and extended the maturity of the Company’s Line of Credit from December 31, 2025 to March 31, 2026. There were no other amendments to the original Line of Credit.
The Company has not drawn against the Line of Credit facility as of June 30, 2024.
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Karveer Meditech, Private Limited (KMPL)
On March 27, 2023 the Company entered into a License Agreement with KMPL, wherein the Company granted to KMPL a limited, non-transferable, exclusive license for the use, sale, or offer of sale in India of the Company’s two clinical test drug candidates titled as NV-CoV-2 and NV-CoV-2-R for the treatment of COVID in patients in India. KMPL has engaged in further drug development in India including sponsoring of drug candidates for human clinical trials in India and has acted as clinical trials manager for such clinical trials. KMPL shall provide NanoViricides with all reports of the clinical trials and the Company can use such reports for further advancement of the drug candidates with regulatory authorities outside India. In consideration, KMPL will be reimbursed by the Company for all direct and indirect costs incurred for the clinical trials and development activities with a customary clinical trials manager fee of thirty (30%) of such costs and applicable taxes. Upon commercial sales of any resulting approved drugs, KMPL will pay the Company a royalty of seventy (70%) percent of the final invoiced sales to unaffiliated third parties.
On April 20, 2023, the Company was notified that the Company’s licensee, KMPL, was authorized to enter into Phase Ia/Ib clinical trials of its COVID, NV-CoV-2 Oral Syrup and its NV-CoV-2 Oral Gummies after satisfying the conditions of a conditional authorization received on or about January 27, 2023.
On June 19, 2023 KMPL commenced the equivalent of Phase I clinical trials in India. The Company has incurred clinical trial costs payable to KMPL of $442,845 and $100,000 for the years ended June 30, 2024 and 2023 respectively, As of June 30, 2024 and 2023, respectively, $227,435 and $100,000 of such costs were accrued by the Company pursuant to the license agreement between the Company and KMPL.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees
The aggregate fees for each of the last two years for professional services rendered by EisnerAmper, our independent registered public accounting firm for our audits of our annual financial statements and interim reviews of our financial statements included in our fillings with Securities and Exchange Commission on Form 10-K and 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those years were approximately:
June 30, 2024 |
| $ | 251,370 |
June 30, 2023 | $ | 248,010 |
No other fees were paid to EisnerAmper for the last two years.
Pre-Approval Policies
The Board of Directors, and the Audit Committee appointed by the Board, currently does not have any pre-approval policies or procedures concerning services performed by EisnerAmper LLP. All the services performed by EisnerAmper LLP as described above were pre-approved by the Audit Committee.
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ITEM 15. EXHIBITS
Exhibits |
| Description |
| Filed / furnished / |
| Incorporated by |
| Date filed | |
3.1 |
|
| Schedule 14C |
| A |
| April 23, 2009 | ||
2 |
|
| Form 10-Q |
| 3.1 |
| February 22, 2010 | ||
3.3 | Plan of Conversion of NanoViricides, Inc. into NanoViricides, Inc. dated May 22, 2023 | Form 8-K | 2.1 | May 25, 2023 | |||||
4.1 |
|
| Form 10-SB |
| 4.1 |
| November 14, 2006 | ||
10.1 |
|
| Form 10-SB |
| 10.5 |
| November 14, 2006 | ||
10.2 |
|
| Form 10-SB |
| 10.6 |
| November 14, 2006 | ||
10.3 |
|
| Form 10-SB |
| 10.11 |
| January 17, 2007 | ||
10.4 |
|
| Form S-1 |
| 10.7 |
| November 29, 2019 | ||
10.5 |
| Agreement of Purchase and Sale between the Registrant and Inno-Haven, LLC |
| Form 8-K |
| 10.1 |
| January 7, 2015 | |
10.6 |
|
| Form 8-K |
| 10.1 |
| February 13, 2017 | ||
10.7 |
|
| Form 8-K |
| 10.1 |
| July 23, 2018 | ||
10.8 |
| Underwriting with Aegis Capital Corp. dated January 21, 2020 |
| Form 8-K |
| 10.1 |
| January 27, 2020 | |
10.9 |
|
| Form 8-K |
| 10.1 |
| January 28, 2020 | ||
10.10 | Form 8-K | 10.2 | January 28, 2020 | ||||||
10.11 |
|
| Form 8-K |
| 10.3 |
| January 28, 2020 | ||
10.12 |
| Director Retainer Agreement between NanoViricides, Inc. and Makarand Jawadekar |
| Form 8-K |
| 10.1 |
| February 11, 2020 | |
10.13 |
| Director Retainer Agreement, dated as of May 15, 2020, between NanoViricides, Inc. and Todd Rokita |
| Form 8-K |
| 10.1 |
| May 19, 2020 | |
10.14 |
|
| Form 8-K |
| 10.1 |
| May 22, 2020 | ||
10.15 |
|
| Form 8-K |
| 10.2 |
| May 22, 2020 | ||
10.16 |
|
| Form 8-K |
| 10.1 |
| July 13, 2020 | ||
10.17 |
|
| Form 8-K |
| 1.1 |
| August 3, 2020 | ||
10.18 | Director Retainer Agreement dated November 13, 2020 between NanoViricides, Inc. and Brian Zucker | Form 8-K | 10.1 | November 13, 2020 | |||||
10.19 | License Agreement dated September 7, 2021 between NanoViricides, Inc. and TheraCour Pharma, Inc. | Form 8-K | 10.1 | September 9, 2021 | |||||
10.20 | Form 8-K | 10.2 | September 9, 2021 | ||||||
10.21 | Form 8-K | 10.2 | October 11, 2022 | ||||||
10.22 | Form 8-K | 10.1 | March 27, 2023 | ||||||
10.23 | Deferred Expense Exchange Agreement between NanoViricides, Inc. and TheraCour Pharma, Inc. | Form 8-K | 10.2 | August 29, 2023 | |||||
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10.24 | Form 8-K | 10.3 | August 29, 2023 | ||||||
10.25 | Extension to Employment Agreement with A. Diwan effective July 1, 2023 | Form 10-K | 10.25 | October 13, 2023 | |||||
10.26 | Extension to CFO Agreement with Meeta Vyas effective July 1, 2023 | Form 10-K | 10.26 | October 13, 2023 | |||||
10.27 | Amendment to License Agreement between NanoViricides, Inc. and TheraCour, dated February 13, 2024 | Form 8-K | 10.2 | February 16, 2024 | |||||
10.28 | Line of Credit Agreement between NanoViricides, Inc. and Dr. Anil R. Diwan, dated November 13, 2023 | Form 8-K | 10.3 | February 16, 2024 | |||||
10.29 | Extension Agreement between the Company and Dr. Anil R. Diwan, dated February 12, 2024 | Form 8-K | 10.4 | February 16, 2024 | |||||
10.30 | Form 8-K | 10.5 | February 16, 2024 | ||||||
10.31 | At Market Issuance Sales Agreement by and between NanoViricides, Inc. and EF Hutton LLC | Form 8-K | 1.1 | April 5, 2024 | |||||
10.32 | Extension of Employment Agreement with Anil Diwan effective July 1, 2024 | Form 8-K | 10.1 | August 9, 2024 | |||||
10.33 | Form 8-K | 10.2 | August 9, 2024 | ||||||
10.34* | |||||||||
14.1 |
|
| Form 10-SB |
| 10.10 |
| November 14, 2006 | ||
19.1* | NanoViricides, Inc. Insider Trading Policy effective September 20, 2024 | ||||||||
23 | |||||||||
31.1 |
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31.2 |
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32.1 |
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32.2 |
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101.INS |
| Inline XBRL Instance Document. |
|
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101.SCH |
| Inline XBRL Schema Document. |
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101.CAL |
| Inline XBRL Calculation Linkbase Document. |
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| |
101.DEF |
| Inline XBRL Definition Linkbase Document. |
|
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| |
101.LAB |
| Inline XBRL Label Linkbase Document. |
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101.PRE |
| Inline XBRL Presentation Linkbase Document. |
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104 | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) | ||||||||
* | Filed herewith | ||||||||
Page 104 of 106
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: September 27, 2024
| NANOVIRICIDES, INC. | |
|
| |
| /s/ Anil Diwan, PhD | |
| Name: | Anil Diwan, PhD. |
| Title: | President and Executive Chairman of the Board of Directors |
| (Principal Executive Officer) | |
|
| |
| /s/ Meeta Vyas | |
| Name: | Meeta Vyas |
| Title: | Chief Financial Officer |
| (Principal Accounting Officer) | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
September 27, 2024 | /s/ Anil Diwan, PhD | |
| Name: | Anil Diwan, PhD |
| Title: | President and Executive Chairman of the Board of Directors |
| (Principal Executive Officer) | |
September 27, 2024 | /s/ Meeta Vyas | |
| Name: | Meeta Vyas |
| Title: | Chief Financial Officer |
| (Principal Accounting Officer) | |
September 27, 2024 | /s/ Brian Zucker | |
| Name: | Brian Zucker |
| Title: | Director |
September 27, 2024 | /s/ Makarand Jawadekar | |
| Name: | Makarand Jawadekar |
| Title: | Director |
September 27, 2024 | /s/ Theodore Rokita | |
| Name: | Theodore Rokita |
| Title: | Director |
Page 106 of 106
NanoViricides, Inc.
Index to the Financial Statements
Contents |
| Page(s) |
Report of Independent Registered Public Accounting Firm (PCAOB ID Number |
| F-2 – F-3 |
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| F-4 | |
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Statements of Operations for the years ended June 30, 2024 and 2023 |
| F-5 |
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Statement of Changes in Stockholders’ Equity for the years ended June 30, 2024 and 2023 |
| F-6 |
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Statements of Cash Flows for the years ended June 30, 2024 and 2023 |
| F-7 |
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| F-8 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
NanoViricides, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of NanoViricides, Inc. (the “Company”) as of June 30, 2024 and 2023, and the related statements of operations, changes in stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has recurring net losses and net cash flow used in operations that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Related Party Transactions
As discussed in Note 4 to the financial statements, the Company enters into certain agreements with related parties which (i) grant exclusive licenses for technologies developed by a related party to the Company for various virus types and (ii) grant exclusive licenses for development and commercialization rights to a related party for certain of the Company’s drug candidates. As part of these agreements, the Company is required to pay certain costs charged by the related parties. These costs include research and development
F-2
costs resulting from their research and development activities which include the performance of preclinical and/or clinical studies and a clinical trial management fee, compensation and other expenses for research and development personnel, supplies and development material. The Company recorded accounts payable – related party and accrued expense for research and development activities of approximately $720,000 and $227,000, respectively, as of June 30, 2024 and research and development costs incurred with related parties of approximately $2,993,000 included in research and development expenses for the year ended June 30, 2024.
We identified the accounting for related party transactions as a critical audit matter due to the materiality of the related party transactions occurring throughout the year and the significant judgment by management to ensure costs being charged are accurate, complete, and properly disclosed. This is turn led to a high degree of auditor judgement, subjectivity, and significant audit effort in applying procedures related to those transactions.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. We obtained an understanding and evaluated the design of the controls related to the Company’s process for identifying related parties and the approval and disclosure of related party transactions. We performed procedures to test the completeness of related party liabilities at the balance sheet date and expenses for the year then ended. Our procedures included, among others, (i) reading agreements and subsequent amendments; (ii) testing invoices on a sample basis to ensure purchases, expenses and milestones are properly recorded in accordance with the agreements and that appropriate approval from management and the audit committee was received; (iii) confirming the accounts payable – related party balance, equipment purchases made on behalf of the Company and the research and development costs paid to the related parties; and (iv) obtaining agreements, budgets and patient enrollment data related to the clinical trial to support amounts accrued as of the balance sheet date. We also made direct inquiries of management and viewed public filings, minutes, and agreements for evidence of related parties, the nature of the relationship and that related party transactions were accounted for and disclosed properly.
/s/ EisnerAmper LLP
We have served as the Company’s auditor since 2014.
September 27, 2024
F-3
NanoViricides, Inc.
Balance Sheet
| June 30, 2024 |
| June 30, 2023 | |||
ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents | $ | | $ | | ||
Prepaid expenses |
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Total current assets |
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Property and equipment, net |
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Intangible assets, net |
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OTHER ASSETS |
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Service agreements |
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Total assets | $ | | $ | | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable | $ | | $ | | ||
Accounts payable – related party |
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Accrued expenses |
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Total current liabilities |
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| — |
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Total liabilities | | | ||||
COMMITMENTS AND CONTINGENCIES (NOTE 11) |
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STOCKHOLDERS’ EQUITY: |
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Series A convertible preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
| ( |
| ( | ||
Total stockholders’ equity |
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Total liabilities and stockholders’ equity | $ | | $ | | ||
See accompanying notes to the financial statements
F-4
NanoViricides, Inc.
Statements of Operations
Year Ended June 30, | ||||||
| 2024 |
| 2023 | |||
OPERATING EXPENSES |
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Research and development | $ | | $ | | ||
General and administrative |
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Total operating expenses |
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LOSS FROM OPERATIONS |
| ( |
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OTHER INCOME (EXPENSE): |
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Interest income |
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Interest expense |
| ( |
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Other income, net |
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NET LOSS | $ | ( | $ | ( | ||
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Net loss per common share- basic and diluted | $ | ( | $ | ( | ||
Weighted average common shares – basic and diluted | | | ||||
See accompanying notes to the financial statements.
F-5
NanoViricides, Inc.
Statement of Changes in Stockholders’ Equity
For the period from July 1, 2022 through June 30, 2024
Series A Preferred | |||||||||||||||||||
Stock: | Common Stock: | ||||||||||||||||||
| Par $0.00001 |
| Par $0.00001 |
| Additional |
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| Total | |||||||||||
Number of | Number of | Paid-in | Accumulated | Stockholders’ | |||||||||||||||
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Deficit |
| Equity | ||||||
Balance, July 1, 2022 |
| | $ | | * | | $ | | * | $ | | * | $ | ( | $ | | |||
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Series A preferred stock issued for employee stock compensation |
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Series A preferred stock issued for license agreement | | | | | | | | ||||||||||||
Common stock issued for consulting and legal services rendered | | | | | | | | ||||||||||||
Warrants issued to Scientific Advisory Board |
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Common stock issued for employee compensation |
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Common stock issued for Directors fees |
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Net loss |
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Balance, June 30, 2023 |
| | | | | | ( | | |||||||||||
Proceeds from sale of common stock in connection with equity financings net of issuance costs of $ |
| — |
| — |
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Series A preferred stock issued for employee stock compensation |
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| — |
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Series A preferred stock issued upon conversion of related party promissory note |
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Common stock issued for consulting and legal services rendered |
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Warrants issued to Scientific Advisory Board |
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Common stock issued for employee compensation |
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Forgiveness of interest on related party debt | | | | | | | | ||||||||||||
Common stock issued for Directors fees | — | — | | — | | — | | ||||||||||||
Net loss |
| — |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
Balance, June 30, 2024 |
| | $ | |
| | $ | | $ | | $ | ( | $ | | |||||
*
See accompanying notes to the financial statements
F-6
NanoViricides, Inc.
Statements of Cash Flows
Year Ended June 30, | ||||||
| 2024 |
| 2023 | |||
CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss | $ | ( | $ | ( | ||
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Adjustments to reconcile net loss to net cash used in operating activities |
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Preferred shares issued as compensation |
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Preferred shares issued pursuant to license agreement | — | | ||||
Common shares issued as compensation and for services | | | ||||
Warrants granted to Scientific Advisory Board |
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Depreciation |
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Amortization | | | ||||
Changes in operating assets and liabilities: |
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Prepaid expenses |
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Other assets |
| ( |
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Accounts payable |
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Accounts payable - related parties |
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Accrued expenses | | | ||||
Other non-current liability-related party |
| — |
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NET CASH USED IN OPERATING ACTIVITIES |
| ( |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchase of property and equipment |
| ( |
| ( | ||
NET CASH USED IN INVESTING ACTIVITIES | ( | ( | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Payment of loan payable | — | ( | ||||
Net proceeds from sale of common stock |
| |
| — | ||
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NET CASH PROVIDED BY / (USED) IN FINANCING ACTIVITIES | | ( | ||||
NET CHANGE IN CASH AND CASH EQUIVALENTS |
| ( |
| ( | ||
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period | $ | | $ | | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: |
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Interest paid | $ | — | $ | | ||
NON CASH FINANCING AND INVESTING ACTIVITIES: |
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Fair value of Series A Preferred shares issued upon conversion of related party convertible promissory note | $ | | $ | — | ||
Forgiveness of interest on related party debt | $ | | $ | — | ||
See accompanying notes to the financial statements
F-7
NanoViricides, Inc.
June 30, 2024, and 2023
Notes to the Financial Statements
Note 1 – Organization and Nature of Business
NanoViricides, Inc. (the “Company”) is a clinical stage nano-biopharmaceutical company specializing in the discovery, development, and commercialization of drugs to combat viral infections using its unique and novel nanomedicines technology. NanoViricides possesses its own facility that supports research and development and drug discovery, drug candidate optimization, cGMP-compliant drug substance manufacturing, cGMP-compliant manufacturing and packaging of drug products for human clinical trials, and early commercialization. The Company has several drugs in various stages of development.
NanoViricides, Inc. is domiciled under the laws of the State of Delaware, with its principal operations located in the State of Connecticut. The Company’s fiscal year begins on July 1st and ends on the next June 30th of the calendar year. The Company operates in
The Company devotes substantially all its activity to advancing research and development, including efforts in connection with clinical trials. The Company’s lead drug candidate is the active pharmaceutical ingredient (API) NV-387. NV-387 is a uniquely broad-spectrum antiviral drug that has demonstrated strong activity in lethal lung infection animal model studies of Coronavirus, RSV, Influenza and even an Orthopoxvirus model for Smallpox and MPox. The Company plans on developing NV-387 first as a treatment of RSV infection in pediatric patients.
At present, NV-387 is undergoing a PhaseIa/Ib human clinical trial for safety and tolerability in healthy subjects for the treatment of COVID-19, sponsored by our licensee and collaborator in India, Karveer Meditech Private Limited (KMPL). The trial involved Phase Ia single-ascending dose and Phase Ib multiple ascending dose studies in healthy subjects. Subjects were sequestered upon enrollment in a dedicated ward of the hospital clinical trial site during treatment. All subjects have been discharged and follow-up visits have been completed as of approximately the end of December 2023. The results of this clinical trial were consistent with the results of a single-injection safety/tolerability study in rats performed in support of the clinical trial application.
The clinical trial application for this clinical trial was submitted during the pandemic and a separate part of the clinical trial for the treatment of COVID patients with NV-387 was also proposed. This second part of the clinical trials was cancelled due to inability to find patients to enroll despite opening a second site. The second site was subsequently closed around April/May 2024. Meanwhile, data upload and crosschecking activities for the healthy subjects Phase Ia/Ib part have now been completed.
The Company is now working on developing the necessary datasets, documentation, and clinical trial pathway and trial designs, for a Phase II clinical trial application for the use of NV-387 for the treatment of RSV infection, as the Phase Ia/Ib study progresses into the data analysis phase.
The Company further plans on expanding the indications of NV-387 to other respiratory viral infections including Influenzas, Coronaviruses, and others.
Additionally, the Company has previously developed a clinical drug candidate, NV-HHV-1 formulated as skin cream, for the treatment of Shingles. The Company plans on taking NV-HHV-1 into human clinical trials, and further develop the HerpeCide™ program after engaging into clinical trials of NV-387 in Phase II for RSV and possibly for multiple indications, including Influenzas. In the HerpeCide program alone, the Company has drug candidates against at least five indications at different stages of development. The Company’s drug candidates against HSV-1 “cold sores” and HSV-2 “genital herpes” are in advanced pre-clinical studies and are expected to follow the shingles drug candidate into human clinical trials. In addition, the Company has drug candidates against HIV/AIDS, Dengue, Ebola/Marburg, and other viruses.
F-8
The Company’s drugs are based on several patents, patent applications, provisional patent applications, and other proprietary intellectual property held by TheraCour Pharma, Inc. (“TheraCour”), a related party substantially owned by Dr. Anil Diwan, to which the Company has broad, exclusive licenses. The licenses are to entire fields and not to specific compounds. In all, the Company has exclusive, worldwide licenses for the treatment of the following human viral diseases: Human Immunodeficiency Virus (HIV/AIDS), Hepatitis B Virus (HBV), Hepatitis C Virus (HCV), Herpes Simplex Virus (HSV-1 and HSV-2), Influenza and Asian Bird Flu Virus, Dengue viruses, Ebola/Marburg viruses, Japanese Encephalitis virus, viruses causing viral Conjunctivitis (a disease of the eye) and Ocular Herpes (restated), Varicella Zoster Virus (“VZV”) infections (i.e. Shingles and Chickenpox), and SARS-CoV-2 infections. In all cases, the discovery of ligands and polymer materials as well as formulations, the chemistry and chemical characterization, as well as process development and related work will be performed by TheraCour, a related party substantially owned by Dr. Anil Diwan, under the same compensation terms as prior agreements between the parties, with no duplication of costs allowed. Upon commercialization, NanoViricides will pay
The Company has executed a new Memorandum of Understanding with TheraCour by signing as of September 23, 2024 and becoming effective as of September 20, 2024, subsequent to the reported period, whereby the Company has obtained a right of first refusal for all antiviral drug developments including unlicensed ones, and has codified the process of development of drugs for unlicensed viral indications leading later to appropriate license agreements. The Parties have also agreed in this MoU that any cash milestone payments related to development activities, that are awardable, will become payable only upon the Company having sufficient revenue, thus extending the provisions previously incorporated in the Amendment to the COVID License Agreement, to all present and future license agreements. This removes any potential cash flow stress that may occur due to such milestone payments while the Company continues its developments while not raising profits.
The Company has out-licensed NV-CoV-2 and NV-CoV-2-R for further clinical drug development and commercialization in the territory of India to KMPL, a company of which Dr. Anil Diwan is a passive investor and advisor. KMPL has sponsored NV-CoV-2 for human clinical trials and has obtained regulatory approvals in India. KMPL has retained a local clinical research organization (CRO) to conduct the clinical trials. NV-CoV-2, Phase Ia/Ib human clinical trials in India, sponsored by KMPL began on June 17, 2023. The clinical trial drug products, NV-CoV-2 Oral Syrup, and NV-CoV-2 Oral Gummies, were manufactured at the Company’s Shelton campus, and then shipped to and received by KMPL. Under the agreement with KMPL, the Company will pay for the expenses of the clinical trials, and in return will benefit from having the data and reports made available for regulatory filings in other territories of the world. Upon commercialization, the Company will receive royalties from KMPL equal to
Note 2 – Liquidity
The Company’s financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. As reflected in the financial statements, the Company has an accumulated deficit at June 30, 2024 of approximately $
As of June 30, 2024, the Company had approximately $
F-9
The ability of the Company to continue as a going concern is dependent upon controlling its overall expenses and identifying and securing additional financing.
The Company believes that it has several important milestones, including data from and final reports from the Phase Ia/Ib human clinical trial for the Company’s broad-spectrum, antiviral drug NV-387. This Phase Ia/Ib human clinical trial is for evaluating the safety and tolerability of two oral formulations of NV-387, namely (i) NV-CoV-2 Oral Gummies, and (ii) NV-387 Oral Syrup, as described elsewhere, with COVID as the indication. The safety and tolerability data from this clinical trial is expected to be applicable as Phase Ia/Ib data for other indications of NV-387 as well, including RSV, MPOX, Influenza and others. Additional milestones include Pre-IND and IND filing to the US FDA for RSV and clinical trial application for Phase II clinical trial of NV-387 for the treatment of RSV infection in adults with the goal towards further regulatory advancement and approval of NV-387 for the treatment of pediatric RSV infection. To this end, the Company is also evaluating the possibility of a Phase IIa clinical trial of a RSV Infection Challenge in Humans.
Management believes that as these milestones are achieved, the Company would likely experience improvement in the liquidity of the Company’s stock, and such improvement, if any, would enhance the Company’s ability to raise funds on the public markets at terms that may be favorable to the terms offered at present.
Management is actively exploring additional required funding through non-dilutive grants and contracts, partnering, debt or equity financing pursuant to its plan. There is no assurance that we will be successful in obtaining sufficient financing on terms acceptable to us to fund continuing operations.
Management believes that it has on-going access to the capital markets including the “At-The-Market” (ATM) agreement with EF Hutton, the Sales Agent, that became active around April 5, 2024.
From July 1, 2024 through September 10, 2024, subsequent to the Company’s fiscal year end, the Company sold
There can be no assurance that the Company’s plans will not change or that changed circumstances will not result in the depletion of its capital resources more rapidly than it currently anticipates. The Company will need to raise additional capital to fund its long-term operations and research and development plans including human clinical trials for its various drug candidates until it generates revenue that reaches a level sufficient to provide self-sustaining cash flows. There can be no assurance that the Company will be able to raise the necessary capital or that it will be on acceptable terms. The accompanying financial statements do not include any adjustments that may result from the outcome of such unidentified uncertainties.
Note 3 – Summary of Significant Accounting Policies
Basis of Presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented.
Net Loss per Common Share
Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through warrants and convertible preferred stock.
F-10
The following table shows the number of potentially outstanding dilutive common shares excluded from the diluted net loss per common share calculation, as their effects were anti-dilutive:
Potentially Outstanding | ||||
Dilutive Common Shares | ||||
For the Years Ended | ||||
| June 30, 2024 |
| June 30, 2023 | |
Warrants |
| |
| |
The Company has
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s balance sheet and the amounts of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for but not limited to, accounting for share-based compensation. Actual results could differ from those estimates.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value for applicable assets and liabilities, the Company considers the principal or most advantageous market in which we would transact and we consider assumptions market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows:
| ● | Level 1: Observable inputs such as quoted prices in active markets; |
| ● | Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and |
| ● | Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets and would be charged to earnings. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. The Company did not identify any indicators or impairment and has not recorded an impairment charge for the years ended June 30, 2024 and 2023.
F-11
Cash and Cash Equivalents
The Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents.
Property and Equipment
Property and equipment is stated at cost and depreciated over the estimated useful lives of the assets, using the straight-line method. The Company generally assigns useful lives of
Intangible Assets
NanoViricides, Inc.’s intangible assets include acquired licenses and capitalized patent costs representing legal fees associated with filing patent applications. Intangible assets with finite lives, licenses and patent costs, are amortized using the straight- line method over the estimated economic lives of the assets, which range from to
Research and Development
All costs of research and development are expensed as incurred.
When preparing our financial statements, we are required to estimate our accrued clinical expenses. This process involves reviewing contracts and communicating with the personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost. Payments under some of the contracts we have with third parties depend on factors, such as successful enrollment of certain numbers of patients, site initiation and the completion of clinical trial milestones, which is usually the case with clinical services contracts.
When accruing clinical expenses, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If possible, we obtain information regarding unbilled services directly from our service providers. However, we may be required to estimate the cost of these services based only on information available to us. If we underestimate or overestimate the cost associated with a trial or service at a given point in time, adjustments to research and development expenses may be necessary in future periods. Historically, our estimated accrued clinical expenses have approximated actual expense incurred.
Stock-Based Compensation
The Company follows the provisions of ASC 718 – “Stock Compensation”, which requires the measurement of compensation expense for all shared-based payment awards made to employees, non-employee directors, and non-employees, including employee stock options and grants of warrants to non-employees. Stock-based compensation expense is based on the grant date fair value estimated in accordance with the provisions of ASC 718 and is generally recognized as an expense over the requisite service period, net of forfeitures.
The fair value of common stock issued as employee and non-employee compensation is the average of the open and close share price on the date the common shares are issued.
F-12
The Series A preferred shares are not traded in any market. The assumptions used to determine the fair value of the Series A preferred shares issued as employee and non-employee compensation are presented in Note 8 to the financial statements.
The fair value of each option or warrant award is estimated on the date of grant using a Black-Scholes option-pricing valuation model. The ranges of assumptions for inputs are as follows:
| ● | Expected term of share options and warrants: The expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration the contractual term of the instruments and employees’ expected exercise and post-vesting employment termination behavior into the fair value of the instruments. The Company uses the simplified method to calculate expected term of share options and similar instruments, as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. |
| ● | Expected volatility of the Company’s shares and the method used to estimate it: Expected volatility is based on the average historical volatility of the Company’s common stock over the expected term of the option. |
| ● | Expected annual rate of quarterly dividends: The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the option and similar instruments. |
| ● | Risk-free rate(s): The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the option and similar instruments. |
The Company’s policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over the requisite service period for the entire award.
Income Tax Provision
The Company uses the asset and liability method of accounting for deferred income taxes. Deferred income taxes are measured by applying enacted statutory rates to net operating loss carryforwards and to the differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets are reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized.
The Company recognizes uncertainty in income taxes in the financial statements using a recognition threshold and measurement attribute of a tax position taken or expected to be taken in a tax return. The Company applies the “more-likely-than-not” recognition threshold to all tax positions, which resulted in
Concentrations of Risk
Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in FDIC or SIPC insured institutions in excess of federally insured limits under the FDIC. Although the Company currently believes that the financial institutions with whom it does business will be able to fulfill their commitments to the Company, there is no assurance that those institutions will be able to continue to do so. The Company has not experienced any credit losses associated with its balances in such accounts for the fiscal years ended June 30, 2024 and 2023.
Recently Issued Accounting Pronouncements
The Company considers the applicability and Impact of all Accounting Standard Updates (“ASU’s”). ASU’s not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s financial statements.
F-13
ASU 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures. The amendments in this Update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate). Additionally, the ASU requires all entities to disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes, as well as individual jurisdictions where income taxes paid are equal to or greater than 5 percent of total income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 31, 2024. Early adoption is permitted and this ASU should be applied on a prospective basis. While the Company is currently evaluating the adoption impact of this ASU on its financial statements, the preliminary assessment is that the adoption of this standard is not expected to have a material effect on the Company’s financial statements and the Company’s disclosures.
ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The requirements of this update require disclosure of significant segments expenses and increase the frequency of segment reporting to interim periods. The ASU is effective for all public companies for fiscal years beginning after December 15, 2023 and for interim period beginning after December 15, 2024. Early adoption is permitted and is applicable to all periods presented in the financial statements unless retrospective application is impracticable. While the Company is currently evaluating the adoption impact of this ASU on its financial statements, the preliminary assessment is that the adoption of this standard is not expected to have a material effect on the Company’s financial statements and the Company’s disclosures.
There have been certain changes in ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it also simplifies the diluted earnings per share calculation in certain areas. The Company adopted this ASU as of July 1, 2023, using the modified retrospective approach without a material impact on its financial statements.
Note 4 – Related Party Transactions
Related Parties
Related parties with whom the Company had transactions are:
Related Parties |
| Relationship |
Dr. Anil Diwan |
| Chairman, President, CEO, significant stockholder through his ownership of TheraCour, and Director |
TheraCour Pharma, Inc. (“TheraCour”) |
| An entity owned and controlled by Dr. Anil Diwan |
Karveer Meditech Private Limited (“KMPL”) |
| An entity where Dr. Anil Diwan is a passive investor and advisor without operating control |
Property and Equipment
For the Year Ended | ||||||
| June 30, 2024 |
| June 30, 2023 | |||
During the reporting period, TheraCour acquired property and equipment on behalf of the Company from third party vendors and transferred such property and equipment, at cost, to the Company | $ | | $ | | ||
F-14
Accounts Payable- Related Party
As of | ||||||
| June 30, 2024 |
| June 30, 2023 | |||
Pursuant to an Exclusive License Agreement entered into with TheraCour, the Company was granted exclusive licenses for technologies developed by TheraCour for the virus types: HIV, HCV, Herpes, Asian (bird) flu, Influenza and rabies. On November 1, 2019, the Company entered into the VZV Licensing Agreement with TheraCour. In consideration for obtaining these exclusive licenses it was agreed: (1) that TheraCour can charge its costs (direct and indirect) plus no more than | $ | | $ | | ||
Research and Development Costs - Related Party
For the Year Ended | ||||||
| June 30, |
| June 30, | |||
2024 | 2023 | |||||
Development fees and other costs charged by TheraCour pursuant to the Exclusive License Agreements between TheraCour and the Company for the development of the Company’s drug pipeline. | $ | | $ | | ||
Clinical Trial Costs - Related Party
For the Year Ended | ||||||
| June 30, |
| June 30, | |||
| 2024 |
| 2023 | |||
Clinical trial related and other costs charged by KMPL pursuant to the license between KMPL and the Company amounted to $ |
| $ | |
| $ | |
F-15
License Milestone Fee – Related Party
On September 7, 2021, the Company entered into a COVID-19 license agreement (the “TheraCour – Nanoviricides COVID License Agreement”) to use, promote, offer for sale, import, export, sell and distribute drugs that treat COVID-19 infections, using TheraCour’s proprietary as well as patented technology and intellectual property. Pursuant to such license agreement, the Board of Directors authorized the issuance of
On July 19, 2023, the Company entered into an agreement with TheraCour, to accept the Company’s unsecured convertible promissory note (the “Note”) in payment of the milestone award. The Note accrues simple interest at the rate of
On February 12, 2024, the Company entered into an Amendment to the COVID License Agreement with TheraCour dated September 7, 2021, whereby any further cash milestone payments that would be earned upon milestone event would only become payable upon the Company having sufficient revenues, with only a portion of revenues to be used for satisfying such milestone payments.
Line of Credit - Related Party
On November 13, 2023, the Company’s President and CEO, Dr. Anil R. Diwan, entered into a Line of Credit Agreement whereby Dr. Diwan agreed to provide a standby Line of Credit to the Company in the maximum amount of $
By signing on September 23, 2024 and becoming effective as of September 20, 2024, subsequent to the reporting period, the Company, pursuant to Article 2.5 of the Company’s Line of Credit Agreement with Dr. Anil R. Diwan, signed an Amendment Agreement which increased the available line of credit from $
F-16
Note 5 – Property and Equipment
Property and equipment, stated at cost, less accumulated depreciation consisted of the following:
| June 30, |
| June 30, | |||
2024 | 2023 | |||||
GMP Facility | $ | | $ | | ||
|
| |||||
Land |
| |
| | ||
|
| |||||
Office Equipment |
| |
| | ||
|
| |||||
Furniture and Fixtures |
| |
| | ||
|
| |||||
Lab Equipment |
| |
| | ||
|
| |||||
Total Property and Equipment |
| |
| | ||
|
| |||||
Less Accumulated Depreciation |
| ( |
| ( | ||
Property and Equipment, Net | $ | | $ | | ||
Depreciation expense for the years ended June 30, 2024 and 2023 was $
Note 6 – Intangible Assets
Intangible assets, net consists of the following:
| June 30, 2024 |
| June 30, 2023 | |||||||||||||||
Finite Lived | Indefinite Lived | Finite Lived | Indefinite Lived | |||||||||||||||
| Intangible Assets | Intangible Assets | Total | Intangible Assets | Intangible Assets | Total | ||||||||||||
Intangible Assets | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Less Accumulated Amortization | ( |
| — | ( | ( |
| — | ( | ||||||||||
Intangible Assets, Net | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Amortization expense amounted to $
NanoViricides, Inc.’s intangible assets include acquired licenses and capitalized patent costs representing legal fees associated with filing patent applications.
Note 7 – Accrued expenses
Accrued expenses consisted of the following:
| June 30, |
| June 30, | |||
2024 | 2023 | |||||
Personnel and compensation costs | $ | $ | ||||
Consultant | | | ||||
Clinical trial costs due to KPML |
| |
| | ||
$ | | $ | | |||
F-17
Note 8 – Equity Transactions
Fiscal Year Ended June 30, 2024 Transactions
On July 19, 2023, the Company entered into an agreement with TheraCour, to accept the Company’s unsecured convertible promissory note (the “Note”) in payment of the milestone award earned under the COVID License Agreement. The Note accrued simple interest at the rate of
On October 6, 2023, the Board of Directors and Dr. Anil Diwan, President and Chairman of the Board agreed to the extension of Dr. Diwan’s employment agreement for a period of
On April 15, 2024, the Company entered into a new ATM sales agreement with. E.F. Hutton Securities, the Sales Agent, pursuant to which the Company may offer and sell, from time to time, through or to the Sales Agent, shares of common stock having an aggregate offering price of up to $
The Company accounted for the proceeds of the ATM Offering, approximately, as follows:
Gross proceeds |
| $ | |
Less: offering costs and expenses | |||
Net proceeds from issuance of common stock | $ |
For the year ended June 30, 2024, the Scientific Advisory Board was granted fully vested warrants to purchase
For the year ended June 30, 2024, the Company estimated the fair value of the warrants granted quarterly to the Scientific Advisory Board on the date of grant using the Black-Scholes Option-Pricing Model with the following assumptions:
Expected life (year) |
| ||
Expected volatility |
| % | |
Expected annual rate of quarterly dividends |
| | % |
Risk-free rate(s) |
| % |
For the year ended June 30, 2024, the Company’s Board of Directors authorized the issuance of
F-18
There is currently no market for the shares of Series A preferred stock and they can only be converted into shares of common stock upon a change of control of the Company as more fully described in the Certificate of Designation. The Company, therefore, estimated the fair value of the Series A preferred stock granted to various employees and others on the date of grant. The fair value of the Series A preferred stock at each issuance was estimated based upon the price of the Company’s common stock after an application for a reasonable discount for lack of marketability.
For the year ended June 30, 2024, the Company’s Board of Directors authorized the issuance of
For the year ended June 30, 2024, the Company’s Board of Directors authorized the issuance of
For the year ended June 30, 2024, the Company’s Board of Directors authorized the issuance of
Fiscal Year Ended June 30, 2023 Transactions
On February 7, 2023, the Board of Directors and a majority of the shareholders of the Company approved the redomiciling of the Company wherein the Company would redomicile from a Nevada corporation to a Delaware corporation. The redomicile became effective on May 30, 2023 pursuant to Section 265 of the Delaware General Corporation Law and Sections 92A.120 and 92A.250 of the Nevada Revised Statutes. The redomicile occurred according to the Plan of Conversion whereby each share of the Company’s $
On April 20, 2023, the Company was notified that the Company’s licensee, KMPL was authorized to enter into Phase Ia/Ib clinical trials of its COVID, NV-CoV-2 Oral Syrup and its NV-CoV-2 Oral Gummies after satisfying the conditions of a conditional authorization received on or about January 27, 2023. Pursuant to the TheraCour – Nanoviricides COVID License Agreement, the Board authorized
On October 6, 2022, the Board of Directors and Dr. Anil Diwan, President and Chairman of the Board agreed to the extension of Dr. Diwan’s employment agreement for a period of
For the year ended June 30, 2023, the Scientific Advisory Board was granted fully vested warrants to purchase
F-19
For the year ended June 30, 2023, the Company estimated the fair value of the warrants granted quarterly to the Scientific Advisory Board on the date of grant using the Black-Scholes Option-Pricing Model with the following assumptions:
Expected life (year) |
| ||
Expected volatility |
| % | |
Expected annual rate of quarterly dividends |
| | % |
Risk-free rate(s) |
| % |
For the year ended June 30, 2023, the Company’s Board of Directors authorized the issuance of
There is currently no market for the shares of Series A preferred stock and they can only be converted into shares of common stock upon a change of control of the Company as more fully described in the Certificate of Designation. The Company, therefore, estimated the fair value of the Series A preferred stock granted to various employees and others on the date of grant. The fair value of the Series A Convertible preferred stock at each issuance was estimated based upon the price of the Company’s common stock after an application for a reasonable discount for lack of marketability.
For the year ended June 30, 2023, the Company’s Board of Directors authorized the issuance of
For the year ended June 30, 2023, the Company’s Board of Directors authorized the issuance of
For the year ended June 30, 2023, the Company’s Board of Directors authorized the issuance of
Note 9 – Common Stock Warrants
Stock Warrants
|
|
| Weighted |
| ||||||
Weighted | Average | |||||||||
Average | Remaining | |||||||||
Number of | Exercise | Contractual life at | Aggregate | |||||||
Shares | Price | June 30, 2024 | Intrinsic | |||||||
Outstanding and exercisable at July 1, 2022 |
| | $ | |
| — | $ | | ||
Granted |
| | | — |
|
| — | |||
Exercised |
| — |
| — |
| — |
|
| — | |
Expired |
| |
| |
| — |
|
| — | |
Canceled |
| — |
| — |
| — |
|
| — | |
Outstanding and exercisable at June 30, 2023 |
| | $ | | — |
| $ | | ||
Granted |
| | |
|
| — | ||||
Exercised |
| — |
| — |
| — |
|
| — | |
Expired |
| |
| |
| — |
|
| — | |
Canceled |
| — |
| — |
| — |
|
| — | |
Outstanding and exercisable at June 30, 2024 |
| | $ | |
| $ | | |||
Of the above warrants;
F-20
Note 10 – Income Tax Provision
The Company has
The income tax expense for the years ended June 30, 2024 and 2023 differed from the amounts computed by applying the U.S. federal income tax rate of
For the Year Ended |
| ||||
|
| June 30, |
| June 30, |
|
2024 | 2023 |
| |||
Federal statutory rate |
| ( | % | ( | % |
Research and development credit |
| | % | | % |
State tax rate |
| ( | % | ( | % |
Other |
| ( | % | ( | % |
Valuation allowance |
| | % | | % |
Effective tax rate |
| |
| | |
The significant components of the Company’s deferred tax assets at June 30, 2024 and 2023 are as follows:
| June 30, |
| June 30, | |||
2024 | 2023 | |||||
Net operating loss | $ | | $ | | ||
Research and development credit |
| |
| | ||
IRC Sec.174 R&E capitalization |
| |
| | ||
Other |
| |
| | ||
Total gross deferred tax assets |
| |
| | ||
Less: valuation allowance |
| ( |
| ( | ||
Net deferred tax asset | $ | | $ | | ||
At June 30, 2024 and 2023, the Company has recorded a full valuation allowance against its net deferred tax assets of
As of June 30, 2024, the Company has approximately $
Due to the change in ownership provisions of the Internal Revenue Code, the availability of the Company’s net operating loss carry-forwards could be subject to annual limitations against taxable income in future periods, which could substantially limit the eventual utilization of such carryforwards. The Company has not analyzed the historical or potential impact of its equity financings on beneficial ownership and therefore no determination has been made whether the net operating loss carryforward is subject to any Internal Revenue Code Section 382 limitation. To the extent there is a limitation, there could be a reduction in the deferred tax asset with an offsetting reduction in the valuation allowance.
The Company does not have any uncertain tax positions at June 30, 2024 and June 30, 2023 that would affect its effective tax rate. The Company does not anticipate a significant change in the amount of unrecognized tax benefits over the next twelve months. Because the Company is in a loss carryforward position, the Company is generally subject to US federal and state income tax examinations by tax authorities for all years for which a loss carryforward is available. If and when applicable, the Company will recognize interest and penalties as part of income tax expense.
F-21
Note 11 – Commitments and Contingencies
Legal Proceedings
From time to time, we are subject to various legal proceedings arising in the ordinary course of business, including proceedings for which we have insurance coverage. There are no pending legal proceedings against the Company to the best of the Company’s knowledge as of the date hereof and to the Company’s knowledge no action, suit or proceeding has been threatened against the Company that we believe will have a material adverse effect to our business, financial position, results of operations, or liquidity.
Employment Agreements
As of July 1, 2024, NanoViricides, Inc. entered into an Extension Agreement (the “Extension”) of the 2024 Employment Agreement with Dr. Anil Diwan entered into on July 1, 2018 (the “Employment Agreement”) to continue to serve as the President of the Company, effective July 1, 2024 under the same general terms and conditions. The Extension provides that Dr. Diwan will continue to serve as the Company’s President until June 30, 2025 at a base annual base salary of $
On March 3, 2010, the Company entered into an employment agreement with Dr. Jayant Tatake to serve as Vice President of Research and Development. The employment agreement provides for a term of
On May 30, 2013, the Company entered into an agreement with Meeta Vyas, wife of our President and Chairman of the Board, to serve as its Chief Financial Officer. The agreement provided for a term of
F-22
License Agreements
The Company is dependent upon its license agreements with TheraCour (See Notes 1 and 4). If the Company lost the right to utilize any of the proprietary information that is the subject of the TheraCour license agreement on which it depends, the Company will incur substantial delays and costs in development of its drug candidates. On November 1, 2019, the Company entered into a Licensing Agreement (the “Agreement”) with TheraCour for an exclusive license for the Company to use, promote, offer for sale, import, export, sell and distribute products for the treatment of VZV derived indications. Process development and related work will be performed by TheraCour under the same compensation terms as prior agreements between the parties, with no duplication of costs allowed. Upon commercialization, NanoViricides will pay
On September 7, 2021, the Company entered into a world-wide, exclusive, sub-licensable, license (“COVID License Agreement”) to use, promote, offer for sale, import, export, sell and distribute drugs that treat COVID-19 infections, using TheraCour’s proprietary as well as patented technology and intellectual property. The discovery of ligands and polymer materials as well as formulations, the chemistry and chemical characterization, as well as process development and related work will be performed by TheraCour under the same compensation terms as prior agreements between the parties, with no duplication of costs allowed. The Company was not required to make any upfront cash payments to TheraCour and agreed to the following milestone payments to TheraCour: (i) the issuance of
On March 27, 2023 the Company entered into a license agreement with KMPL wherein the Company granted to KMPL a limited, non-transferable, exclusive license for the use, sale, or offer of sale in India of the Company’s
On February 12, 2024, the Company entered into an Amendment to the COVID License Agreement with TheraCour dated September 7, 2021, whereby any further cash milestone payments that would be earned upon milestone event would only become payable upon the Company having sufficient revenues, with only a portion of revenues to be used for satisfying such milestone payments.
F-23
Note 12 - Subsequent Events
As discussed at Note 8 to the financial statements, on April 15, 2024, the Company entered into a sales agreement with. E.F. Hutton Securities (now EF Hutton, LLC), the Sales Agent, pursuant to which the Company may offer and sell, from time to time, through or to the Sales Agents, shares of common stock At-the-Market or ATM Offering. From July 1, 2024 through September 10, 2024 the Company sold
By signing on September 23, 2024 and being effective as of September 20, 2024, the Company, pursuant to Article 2.5 of the Company’s Line of Credit Agreement with Dr. Anil R. Diwan, signed an Amendment Agreement which increased the available line of credit from $
By signing on September 23, 2024 and being effective as of September 20, 2024, the Company entered into a “Memorandum of Understanding for All Antivirals Drug Development” (the MoU) with TheraCour that granted to the Company, a limited, non-assignable, non-sublicensable, exclusive Right of First Refusal to License to any antiviral drugs in development or to be developed by TheraCour for research and development purposes only, for all as-yet unlicensed viral infection treatment indications. The MoU also clarified the roles and responsibilities of the Parties and essentially codified the process that the parties have adopted since inception. The MoU further codified the treatment of all future milestone payments arising from any current or future license agreements to TheraCour to be consistent with the principles adopted in the February 12, 2024 Amendment to the COVID-19 License Agreement.
F-24